A resurgent Yahoo?
There is an email in my Yahoo inbox dated June 30th, 2001. It represents the date I opened an email account with Yahoo. The reason for my signing on with Yahoo 14 years ago remains the same today: the might of the Yahoo brand.
1) Might in digital dollars
With Google and Facebook as the dominant forces in today’s digital age, it is easy to forget what a mighty entity Yahoo became soon after its inception in January 1994. Originally meant as a ‘guide’ to the web and a directory of other websites, within a year it morphed into a web portal and gained a million hits. An improved search engine together with premium content in the form of news, weather, sports and of course, email, made Yahoo the de facto ‘gateway to the internet’, easily competing with and overshadowing the likes of AOL, Lycos and MSN.
Gaining millions of users, Yahoo became a favourite with brands, which did not hesitate to digitally advertise on Yahoo.
At one point, Yahoo had such digital traction that high-end and digitally savvy brands such as Adidas were paying up to $500,000 per day for a full page takeover of the Yahoo portal homepage for their campaigns, including the trend-setting 2004 ‘Impossible is Nothing’ video.
The clip featured Laila Ali, the daughter of boxing legend Muhammad Ali, fighting a mock boxing match with her father – thanks to digitally restored footage of Ali himself. The Adidas/Yahoo-takeover was one of the most successful digital ads placed on Yahoo, with over five million downloads and a highly impressive average video engagement time of 22 seconds for the 30-second clip – analytics that even today are hard to beat. The advent of Google, however, put a serious dent in Yahoo’s ad revenues and search ad business. Social-specific sites such as Facebook meant that the competition for digital ad dollars became not only more diverse, but far more serious in nature.
2) Might in mobile dollars
Contrary to what people think, developing a large user base has never been the problem for Yahoo – keeping them engaged via the web portal for a decent amount of time, however, is. Yahoo’s 800 million users have access to email, Flickr and various categories of news – but in order to reverse its declining advertising revenue, which fell a further six percent in 2014, Yahoo’s chief executive, the enthralling Marissa Mayer, has put into motion several initiatives that are showing strong signs of bringing back some of the former brand power of Yahoo.
Among these, the clear winner is Mayer’s drive to seriously challenge both Google and Facebook in the area of mobile advertising.
While Google and Facebook dominate US mobile advertising revenues with a 37% and 17% share respectively, with Yahoo trailing at 3.2%, eMarketer confidently predicts that Yahoo will overtake third placed Twitter to become “the third biggest player in the US mobile ad market in 2015.”
According to ComScore, although the Yahoo display ad network still remains “the second biggest after Google”, its clout is diminishing. However, Yahoo’s recent acquisition of the mobile ad network Flurry means that it has partnered with one of the leading mobile ad delivery and analytics firms in the world to give it a highly significant edge in the mobile space.
As a consumer, you are not likely to have heard of Flurry, but mobile app developers are more than familiar with it. Flurry works closely with mobile app development companies during the design and coding stages to embed tracking and analytical tools, and has been extremely successful in collaborating with them. So much so, that industry experts estimate that seven out of 10 mobile apps have Flurry’s analytical tool embedded in them, which is then used to capture real-time mobile user data and help Flurry establish a highly accurate picture of how people use their apps.
On average, Flurry collects three terabytes of data per day which helps the company create ‘personas’ or psychographic profiles such as ‘business traveller’ or ‘sports fanatic’. With data edited every two weeks for each Flurry ID or user, the company is able to deliver personalised and accurate mobile ads. It is widely agreed that Flurry’s expertise has enabled it to track more mobile phones than Google and Facebook combined. Furthermore, the entire process is far more effective in profile and usage building than ordinary cookies found on desktop browsers and neatly solves the problem of cookies not being supported by many mobile phone browsers.
Yahoo’s mobile-centric ad strategy has already paid off and the portal reported in March 2015 that “sales of ads from mobile devices rose 23% in 4Q 2014 and now make up for 20% of total sales” – an impressive transformation considering that only a year ago, The Wall Street Journal declared Yahoo’s mobile revenues “essentially immaterial”.
Yahoo reported mobile ad sales of over $200 million in 3Q 2014 and over $254 million in 4Q 2014, 10% higher than it had predicted for 2014.
This was a first disclosure of the impact the strengthening of Yahoo’s mobile business has had. In addition, Yahoo has re-engineered and redesigned several of its already popular mobile apps such as Yahoo News and Yahoo Mail.
3) Might in being native
Despite the focus on mobile ad serving and mobile apps, Mayer has not ignored publishers’ growing use of native ads. A digital version of the classic advertorials of yore, research has shown that online users, especially mobile ones, are less likely to ignore native ads. This is because, in most cases, the ads don’t look like ads, but are designed to fall in with the ‘native’ look, format and feel of the page or platform they are displayed on.
Business Intelligence (BI) recently reported that spending on native ads in the US alone will reach $7.9 billion (almost double of last year’s figure) and is predicted to grow to $21 billion by 2018. The less disruptive nature of native advertising has produced higher CTRs (Click-Through-Rates) than traditional banner ads, predominantly on mobile devices. Yahoo, in particular, has been commended by BI, which states that “the native ads on Yahoo’s news pages and apps, will see the fastest ramp-up.”
On a personal level, it is immensely satisfying to see the branding power of Yahoo move into the ‘superb’ category again. The seeds for transformational change were sown with Yahoo’s ‘30 logos in 30 days campaign’ in 2013, when the portal invited followers to vote for a new look logo design based on its iconic purple brand colour (tinyurl.com/Yahoo30-days) – a vivid display of rebranding without losing the spirit of its brand presence. Those seeds have now grown to form the resilient force that Yahoo was always conceived to be.
Yasmin Malik is a Telecom Analyst associated with the UK’s Informa Telecoms & Media.