David Karp: Tumblr’s Revenue Model Is All About Telling Stories

In a fireside chat with MG Siegler at TechCrunch Disrupt Monday, Tumblr founder David Karp described how his company thinks differently about advertising than Facebook or Google, and how they hope to make it less distracting and more meaningful to users. In short, it’s all about telling stories.

Karp said that for Tumblr, the stuff that appears in the main feed is pretty sacred, as it’s all content that users have chosen to subscribe to. Instead of inserting branded content into the stream in the same way that companies like Twitter are beginning to do, Tumblr has instead reserved the right-side column for content that users may not have seen.

But the differences go deeper than that — Karp wants brands and marketers to use Tumblr as a way to tell stories that they can’t otherwise tell on other social networks or with search ads.

“The new revenue model we recently put in place is built around creative brand advertising, which is something that Facebook and Google don’t support,” Karp said. Rather than a/b testing a blue link to try to find the most effective direct response ad, Karp wants brands to use Tumblr to tell stories that create intent on the part of consumers — which is the type of advertising that they want to see anyway.

Also, while much of the available ad space being sold by other Internet companies goes to big brands, Karp sees an opportunity to make inventory available to individual users, who could use the space more effectively, and who might not annoy their friends in the way that brand advertising might.

“We want to make some real estate available not just to big brands, but to carve it out for people that are already a part of the network,” Karp said. “It’s problematic when that American Express post shows up in your feed, but it’s different when it’s one of your friends.”

In addition to talking about the new revenue products, Karp described the organizational transition which recently took place and enabled long-time Tumblr president John Maloney to resign. Tumblr has grown from 15 employees to more than 105 since the beginning of last year. A lot of those hires were made to add senior executives to the staff who could oversee various different parts of the organization. Not only did that allow Maloney to step down, but it also meant that Karp hasn’t really written any code over the last six months.

Karp said it took a while for him to embrace the change, but now he’s able to dream stuff up, whiteboard it, and a team of engineers who were “worlds more brilliant than [he] ever was can build it.”