Demographic Grab: The Reasoning Behind Yahoo’s Tumblr Acquisition

When Facebook shelled out $1 billion for Instagram last year, we all assumed that this was a grab for the photo app’s fast-growing base of young and hip users.¬†Last week, when Yahoo announced it’s $1.1 billion purchase of Tumblr, many murmured that Marissa Mayer and Co.’s reasoning was similar: to acquire a sea of young, hip users. But Yahoo doesn’t want young cohort to up its cool factor; rather, they want to be able to sell this bunch to advertisers.

So who are these Tumblr-ers, anyway? Three qualities define this audience: young, affluent and extremely protective of their beloved platform.

They’re young.

A 2013 survey shows that there are more teens and young adults who said they use Tumblr on a regular basis than those who said they use Facebook. To compare numbers, 59% of 13-25 year olds said they use Tumblr regularly, versus 54% who said they use Facebook regularly.

They’re wealthy.

According to Comscore, one third of active Tumblr users come from households with incomes over $100,000 per year.

They’re fiercely protective.

Tumblr users were quick to react to rumors of Yahoo’s purchase, openly sharing fears that the acquisition would tarnish their beloved platform.

At the end of the day, the acquisition likely had everything to do with this equation: big, valuable audience + free content = source for ad revenue. These young, wealthy content creators and consumers are a marketer’s dream. But to unless they want to lose this newly acquired audience, Yahoo needs to tread carefully with its next move. Our bet? Native¬†advertising with a focus on cleverly-executed sponsored posts.