How Tenor Aims To Get GIF-Sharing Onto Every Mobile Phone
Google owns search intent. Facebook owns the social graph. But the “emotional graph” is still up for grabs -- or so goes the argument David McIntosh, cofounder and CEO of the mobile GIF keyboard and search engine Tenor.
Tenor isn’t as well known as some big-name GIF engine competitors like Giphy, which has raised about $150 million in venture funding to date, most recently at an estimated valuation of $600 million. However, Tenor now powers 300 million GIF searches daily (up from 200 million daily searches in February) through its mobile GIF keyboard and hundreds of integrations with communications apps like Apple ’s iMessage, Google’s smart keyboard app Gboard, Facebook Messenger, Twitter , WhatsApp, LinkedIn , Slack , Discord and Kik. Tenor, which launched on mobile, also says it powers more shares of the short, looping videos and animations than any other tool.
“A lot of people look at GIFs and see something fun and silly, but really what gets us up every day is that GIFs are a better way to convey thoughts, feelings and emotions at a time when attention has shrunk,” McIntosh said in an interview at Tenor’s San Francisco headquarters. McIntosh is pointing to a display of the company’s “Emotional Graph,” a digital map that links GIFs with keywords, topics, feelings, moods and brands to help people retrieve GIFs that best fit their mood or what’s top of mind, like “Friyay,” “hungry,” or “dance.”
“Beneath the surface, Tenor is really all about a new type of search engine -- one that’s emotion-based, that more than 300 million times per day, is matching people’s thoughts and emotions with a digital object -- the GIF.”
While GIFs were first invented three decades ago and popularized by websites like MySpace, Imgur, Tumblr and Giphy, they have only been readily available within mobile keyboards for about three years. Now, about 70% of Americans ages 8 to 64 years old (about 200 million people) know how to send a GIF, and nearly half of those consumers send at least one GIF per week according to consumer research firm Magid Advisors. Magid’s President Michael Vorhaus says it’s hard to precisely estimate how rapidly GIF-sharing can grow. However, in two to three years, Vorhaus says mobile shares of GIFs could grow by 1,000%, generating $1 billion or $2 billion in total annual advertising revenue.
“It’s not going to be small,” Vorhaus said of the business opportunity of mobile GIFs. “It’s the classic ‘picture is a thousand words.’ People love photos, love videos and GIFs let consumers be very verbal in one message.”
Since launching three years ago, Tenor has secured foothold in the steadily growing space of mobile GIF-sharing, where it also competes with Giphy. Tenor’s “GIF Keyboard” is the most downloaded app in its category on both iOS and Android, according to analytics firm App Annie, and over the past two years, Tenor’s average keyboard download ranking has been roughly twice as high as Giphy’s on iOS and Android. Tenor’s GIF bot is also the most-used chat bot on Facebook Messenger, and its iMessage app is the no. 2 free app on Apple’s messaging “App Platform,” behind GamePigeon.
Tenor says it can’t disclose usage figures specific to platforms such as Facebook, Twitter, Apple and Google because of the nature of its partnership agreements. However, Tenor says its standalone Tenor GIF Keyboard on iOS and Android generate nearly 20% of all Tenor-powered searches, with the typical user accessing their keyboard more than 50 times per month. In the past year, Tenor has doubled its headcount to 43 people, opened offices in Los Angeles and New York and launched its nascent advertising business, which began generating revenue earlier this year. (Tenor hasn’t disclosed revenue figures.)
Giphy recently said more than 150 million people use its site and apps every day and also has a popular GIF creation tool called Giphy Cam. The company is testing different business models but its monetization efforts are still early. Giphy did not respond to requests for comment.
“Tenor is the clear leader in terms of usage and engagement,” said Chris Moore, partner at Redpoint Ventures, a Tenor investor. “The range of messaging partners we’ve been able to sign gives me confidence this can be a ubiquitous social platform.”
Tenor has raised a total of $32 million since raising its seed round in late 2014. Most recently, Tenor raised $17 million in new funding through a Series B round announced this month (led by Tenaya Capital and joined by Redpoint Ventures, Menlo Ventures, Cowboy Ventures, among others). Now, Tenor plans to double its headcount again in the next year, scale its business and work toward McIntosh’s goal of being the dominant GIF search engine across the world’s 2-billion-plus smartphones.
“The basic idea is every single place people today are typing text or emoji, there will be a Tenor GIF button to let people express themselves more accurately and precisely,” McIntosh said. “Our no. 1 competitor isn’t Giphy. It’s someone saying something in text or not saying anything at all. We’re competing against people not having the time to express themselves.”
To make expression easier, Tenor is working with nearly every major Hollywood studio and TV network, such as 21st Century Fox, Dreamworks, Netflix, Showtime, Warner Bros., Vevo, Paramount and NBC Universal, to help create GIFs people will want to share without realizing they might also be sponsored by a brand. Tenor also helps companies outside of entertainment, such as food and beverage companies and advertising agencies, generate GIFs often from content they have already created for other campaigns.
Tenor’s sponsored GIF model charges marketers anywhere from about $100,000 to $500,000 to secure a top GIF search result in Tenor’s search engine. Domino’s, for example, could pay to feature a branded GIF of someone biting into a slice of pizza whenever a Tenor user searches keywords like “party” or “satisfied.” The more people search, save or favorite GIFs within Tenor’s engine, the more nuanced the “Emotional Graph” becomes and the faster Tenor becomes at serving people relevant GIFs. Tenor’s engine learns patterns, for example, that if someone searches for “wink,” they will likely search for “flirty” five minutes later. It can also learn that someone only speaks in Harry Potter GIFs with a friend and Seinfeld GIFs with a parent. Speedy, pertinent search results are crucial. Tenor users usually spend just 20 seconds to search for and send a GIF.
Tenor’s chief business officer, Jason Krebs, a digital sales veteran the company hired in March, said in a phone interview that sponsored GIF efforts so far have been “well-received,” noting one of Tenor’s key selling points is that users see sponsored GIFs because they opt to personally send them to one another, not because they were forced to view a display ad. In a test in December, for example, Tenor drove 10.4 million views to Domino’s GIFs on New Year’s Eve alone. In one weekend in July, Tenor helped generate 95 million views on Justice League GIFs in before the movie’s debut. (McIntosh discovered the power of brand’s emotional associations when shares of a “Taken 3” film GIF skyrocketed in 2014 after the startup added “Yolo” as an associated search term.”) Tenor’s recent “Insights” tool can help companies use data to understand what attributes and imagery are most associated with their brand.
“We’re able to give advertisers awesome insight into human emotion that’s unprecedented in marketing,” said Krebs. “You can’t buy TV ads against an emotion.”
Tenor charges marketers based on total shares of GIFs, not on views. McIntosh said Tenor’s prime GIF search result slot, the upper left corner, often receives more shares when it features sponsored content from a band compared to an organic search result, in large part because of the quality of the sponsored content.
“Giphy clearly wins the Silicon Valley award -- They have raised the most money and are known by the most venture capitalists,” says Magid Advisors’ Vorhaus. “But Tenor has a better angle on revenue, which is trying to deliver ad messages based on people’s state of mind.”
eBay CMO Suzy Deering said she decided to test Tenor’s sponsored GIFs because of the growing popularity of GIFs and Tenor’s scale.
“For eBay, Tenor is an opportunity to be an authentic brand and one that’s reaching you in the moment in your day-to-day life,” Deering said.
Rise of Visual
McIntosh, 30 (and a Forbes 30 Under 30 alum), cofounded Tenor with Erick Hachenburg and Frank Nawabi in San Mateo, California in 2014 after seeing how the explosion in emoji showed consumers were willing to toggle between keyboards to communicate more visually. The cofounders had a hunch that video would make messaging more expressive, so they set out to create an easy tool to enable smartphone users to share video and animated clips without manually pulling GIFs from the web. Three years ago, when Apple started supporting third-party keyboards, McIntosh and Hachenburg debuted Tenor’s iOS GIF keyboard (Tenor changed its name from Riffsy a year ago in a push to improve branding). It was downloaded more than a million times in its first week.
“Tenor was the first keyboard into the market and the first to get to critical mass,” McIntosh said. “That gave us a mobile lead that we continue to carry up today.”
For the next year, McIntosh is focused on expanding Tenor’s trove of content, particularly internationally and from local services. Long-term, McIntosh wants to enable people to send GIFs via Tenor through essentially any communication channel, whether voice devices in the home or self-driving cars. Tenor branched out further this month by making it possible for developers to integrate GIFs into augmented reality experiences, for example, wrapping a GIF around a physical object or adding GIF reactions to locations or pieces of information, like menu items at a restaurant.
McIntosh predicts that in five years, every mobile user will be sharing GIFs, making them “utterly ubiquitous. To get there, he knows he needs to keep investing in new messaging and distribution avenues.
“You can’t just stick with one app,” McIntosh said. “If you want to be the top player, you need to think about the app as giving you the best data set and most engaged users, which powers the service everywhere.”