Meet Imgur and what it sees as advertising's future

You may not have heard of Imgur or even know how to say it. (For your information, it's pronounced image-er.) But, with more than 150 million monthly active users who view more than 60 billion images on its platform each month, the photo uploading service says its platform and Imgurian community is exactly the audience that brands want.

Imgur later this summer plans to roll out Promoted Posts, its take on native advertising or brand-created content. Working hand in hand with marketers, it will impart its knowledge on viral images and memes to help companies create customized items for its platform.

"I don't think display advertising is the future of advertising," Imgur CEO Alan Schaaf said.

Schaaf created Imgur in 2009 to solve a simple yet annoying problem for users of social news website Reddit who wanted to upload images quickly. Over the years, Imgur's users started turning it into an online community. People began writing comments below each photo and replying using each others' usernames, prompting the picture-based service to add direct messaging and other interactive features. Content began branching out from humorous images and online jokes to educational content showing how a child's voice could break a glass to a support group, including backing a fellow Imgurian whose daughter was undergoing surgery.

"That's when things started to change for us a lot," Schaaf said. "There's definitely a more to us than memes and cats. People are sharing their visual stories on the platform in a really authentic way."

In April 2014, Andreessen Horowitz gave Imgur $40 million during its first round of funding, which valued the company at about $200 million according to the Los Angeles Times.

However, the company has always been supported by advertising, with brands attracted to its dedicated 85 percent male millennial user base. While Facebook, Instagram or Twitter may have more users, 82 percent of Imgurians spend upward of three hours weekly on Imgur, and 17 percent spend more than 10 hours a week on the platform. In December 2014, it reported that users spend an average of 10 minutes per session on its website.

But, Schaff said that while it used to rely on digital display ads, it now is searching for a way to create native advertising opportunities. Not only does this help brand messages resonate more, he said it creates a better user experience. Instead of a user having to glance past a banner ad on a page, branded posts will be woven in throughout the site's content, with appearance frequency changing based on user activity and tastes. During its tests, its promoted posts were viewed an average of 25 seconds, just shy of the TV ad viewing standard of 30 seconds.

"This is definitely the future of monetization at Imgur," Schaaf said.

Greg Portell, a global partner in management consulting firm A.T. Kearney, said that Imgur could be poised to be the next big social media network. He explained that once a platform establishes a large user base, its momentum helps maintain its powerhouse status for an extended period. He believes Imgur is on its way here.

While this news may encourage advertisers to get on board now, he said the success of Imgur's upcoming native advertising offerings lies in the quality of the content and how it affects the user experience. If it doesn't fit in with the typical content on the site, it will turn off the die-hard community.

"It will come down to how their audience connects with the (branded) content," Portell said. "If they are able to find some of their super users and super posters and start nurturing them into creating branded content without violating that classic church and state, it could work. I find it hard to see a traditional ad agency getting on the platform in a way that is not disruptive."

For the most part, Imgur seems to understand that if it wants Promoted Posts to succeed, it needs to handle native ads with kid gloves.

Steve Patrizi, Imgur vice president of marketing and sales, added that the company is building out an in-house creative team to help with Promoted Posts. In addition, it has been testing its Promoted Posts in-house by creating ads for its products including a box of Imgur-branded items and Camp Imgur, a Boy Scout camp that it rented out to host a Imgurian community sleepover.

Both test ads had to be halted due to overwhelming response. It also ran a promotional contest for Fox's "Let's Be Cops," and raised more than $108,000 to aid Nepal by turning images that users had shared about the earthquake there into ads.

"We really see what we're doing first and foremost as a way to inject valuable content on Imgur fo Imgurians," he said. "We want people to love the content, and what they love, they'll share."