Key Challenges
Tumblr’s main source of income is stream advertising, similar to how Facebook, Instagram, and Twitter make money. However, Tumblr’s users base is significantly smaller than any of its social media peers, making it less financially viable to base its business model on advertising alone. To compound the problem, users who do log in do so with an email address and are not required to provide the wealth of ad targeting information that Facebook requests from users. Although Tumblr does technically make money, the social media website has yet to show signs that its $1 billion price tag was worth it.
Tumblr’s main source of income is stream advertising, similar to how Facebook, Instagram, and Twitter make money. However, Tumblr’s users base is significantly smaller than any of its social media peers, making it less financially viable to base its business model on advertising alone. To compound the problem, users who do log in do so with an email address and are not required to provide the wealth of ad targeting information that Facebook requests from users. Although Tumblr does technically make money, the social media website has yet to show signs that its $1 billion price tag was worth it.
