With 200M daily users, Giphy will soon test sponsored GIFs

And it’s about time.

Giphy, the four-year-old search engine for GIFs, is going to finally start testing monetization.

According to a source close to the company, Giphy will begin testing sponsored GIFs within messaging experiences. This means that users who search for GIFs may be served a sponsored GIF within the messaging tab.

There are some obvious use-cases here: A search for “Monday” or “morning” might turn up a Starbucks GIF. But there is also an opportunity for brands, especially movies and TV shows (which makes up a huge portion of Giphy’s content), to work their existing content into people’s messages.

Structurally, this isn’t too different than what Google does with search terms. If you search for “Walmart,” you’ll more than likely see a sponsored listing for both Walmart and Target.

With Giphy, however, searches are rarely for specific brands but rather based around certain actions, reactions or emotions. With the forthcoming sponsored messaging product, a search for “Wooo” might turn up a GIF of someone pouring Jose Cuervo shots. A search for “cheers” might show folks clinking two Budweiser beer bottles together. (If Netflix doesn’t buy ads against “chill,” I’ll be really disappointed.)

What’s more, sponsored content on Giphy would function in a way similar to Snapchat’s sponsored face filters. Even if it includes branded content, the fact that it comes from a friend makes it worth watching and makes it easier to connect with.

The same source also said that Giphy is now seeing 200 million daily active users between both the API and website, with around 250 million monthly active users on the website, as well as Giphy’s owned and operated integrations. That means the majority of Giphy’s users are interacting with the service every single day.

Neither my source, nor Giphy, would confirm a timeline for the launch of ad products. That said, Giphy COO Adam Leibsohn did confirm that the company has shifted focus from growth to building ad products, without adding much detail on what those products might look like.

“With GIPHY Studios, we’ve been executing on creative partnerships for over a year,” said Leibsohn. “That work helps inform our thinking and exploration around what our ad products will look like.”

I also asked Leibsohn which brands would be the first to test out Giphy’s ad products.

“We already work closely with the world’s leading brands in content, entertainment, technology and advertising,” said Leibsohn. “When we’re ready to launch our ad products, it naturally follows that we’ll be working with our existing partners.”

As far as testing is concerned, it’s unclear which platform Giphy will wade into first. Nor is it clear what sort of a business model sponsored content would take when served on a third-party platform, outside of Giphy’s own site and app.

Slack, iMessage, Facebook Messenger and Twitter are all huge platforms for Giphy, but they may be a little too big to do initial testing. Remember, Giphy is the same company that launches standalone app after standalone app simply to learn what will and won’t work with its users.

Strategically, the best place for Giphy to start testing sponsored content would be Tinder, in my opinion. Tinder has an integration with Giphy that gets a lot of play — in fact, one of the top 25 most popular Giphy GIFs from last year climbed the charts courtesy of Tinder users.

And while Tinder and Giphy are a match made in (user engagement) heaven, it’s not as high-stakes as debuting an ad product on a public platform like Twitter, nor is it as tricky or unpredictable as the mostly professional environment of Slack.

Tinder did not immediately respond to a request for comment.

Giphy has a lot of options when it comes to generating revenue. Alongside selling sponsored content within messaging, the company also sees a ton of traffic to the Giphy website. In fact, Giphy says that more than 50 percent of the people that come to the company’s website are coming with the intent to browse.

This opens up the opportunity to sell native ads, via search terms, on the website, too.

Plus, Giphy currently works to ‘live-gif’ big events like the Oscars, Golden Globes, etc. For now, Giphy’s team does this for free, but you can see how they might eventually start inking licensing deals around these events. And that doesn’t even include the troves of old content — think “Full House” and “Seinfeld” — that Giphy turns into GIFs for big broadcast and cable networks.

While many believe that P2P native content will be a huge part of the future of advertising, it hasn’t become immediately clear what a successful version of that will actually look like. But, in a relatively short time, Giphy has become an ingrained part of the way we communicate, whether it’s in iMessage, on Twitter, Tinder or Slack.

Giphy picked up $72 million in October 2016, bringing total raised to $150 million at a reported valuation of $600 million.

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