News / Economy

Yahoo CEO Mayer has Advertisers' Attention, but Can She Get Their Dollars?

FILE - The Yahoo logo is shown at the company's headquarters in Sunnyvale, California. FILE - The Yahoo logo is shown at the company's headquarters in Sunnyvale, California.
x
FILE - The Yahoo logo is shown at the company's headquarters in Sunnyvale, California.
FILE - The Yahoo logo is shown at the company's headquarters in Sunnyvale, California.
Reuters
​Three weeks ago, Yahoo Inc Chief Executive Marissa Mayer strode into a Manhattan hotel and was greeted like a rock star by hundreds of advertising executives who snapped pictures as she sat down for an interview with journalist Charlie Rose.
 
That same audience a year ago would have been grousing that Mayer had not done enough to engage Madison Avenue, which is arguably Yahoo's most important constituent since the Internet company derives more than 75 percent of its revenue from ad sales.
 
“I think that Marissa has gotten a bit of a bad rap,” said David Cohen, the chief media officer at UM, the global media arm of Interpublic Group.
 
The industry perceived Mayer as not caring about advertising, choosing instead to focus solely on products, Cohen said.
 
Ad agency executives say that over the past six months Mayer and her team have been working hard to change that perception, courting advertisers at key industry events, hosting lunches and attending meetings with agency representatives that include Yahoo excutives like Chief Operating Officer Henrique de Castro, Senior Vice President and head of Americas Ned Brody and Chief Marketing Officer Kathy Savitt.
 
FILE - Yahoo CEO Marissa Mayer speaks during a news conference in New York.FILE - Yahoo CEO Marissa Mayer speaks during a news conference in New York.
x
FILE - Yahoo CEO Marissa Mayer speaks during a news conference in New York.
FILE - Yahoo CEO Marissa Mayer speaks during a news conference in New York.
The charm offensive has impressed many on Madison Avenue, but getting advertisers to actually spend more on Yahoo's Web properties will not happen overnight, industry experts said.
 
The shift to advertising exchanges, which allow marketers to instantly buy placement for their ads across a broad constellation of websites, has pushed down the prices that online publishers such as Yahoo can charge.
 
That was painfully apparent in the second quarter of this year, when Yahoo's display advertising revenue slid 11 percent due in part to a double-digit decline in ad prices.
 
“Advertisers will become more excited if there's clear evidence that Yahoo is growing again in terms of its users and its engagement,” said Mark Mahaney, an analyst at RBC Capital Markets.
 
Since Mayer became CEO, Yahoo's stock has more than doubled, recently reaching a near 8-year high of $35.06. But analysts say the gains are mostly due to aggressive share buybacks and the impending initial public offering of Chinese e-commerce giant Alibaba Group, in which Yahoo owns a 24 percent stake.
 
More than a year into Mayer's tenure, Yahoo's core business remains stagnant. Revenue has been flat or down for the past four years and Wall Street does not expect the situation to improve when Yahoo reports its third-quarter results on Tuesday.
 
Analysts are expecting third-quarter revenue to decline around 1 percent to $1.08 billion, according to Thomson Reuters I/B/E/S.
 
A Yahoo representative said the company has built a team to specifically focus on agency relationships and has recently realigned its sales force according to industry expertise.
 
Yahoo is “working closely with our advertisers to develop opportunities in a more integrated way across our full suite of media, programmatic, video and mobile properties,” Yahoo said in an emailed comment.
 
Mobile target
 
Yahoo is trying to play catch-up to Facebook Inc, Twitter Inc and Google Inc in the fast-growing mobile advertising business, as consumers increasingly access the Web on smartphones instead of PCs, and flock to social media websites that require novel ad formats.
 
Spending on mobile ads grew 145 percent year over year to $3 billion in the first six months of 2013, according to the Internet Advertising Bureau.
 
Mayer has revamped many of Yahoo's mobile apps to make them more attractive to consumers and advertisers. In May she spent $1.1 billion to acquire Tumblr, a popular blogging and social media website.
 
“There's a promise there but it's not ready for prime time today,” said Ritu Trivedi, managing director, digital marketplace at MediaVest, a Publicis media agency, referring to Yahoo's mobile ad efforts.
 
Mayer has said that turning Yahoo's business around will be a multi-year process. She has accelerated the pace of product development, and added workplace perks such as free food and top-of-the-line smartphones for employees.
 
But even as the CEO tries to forge closer ties with advertisers, she has made it clear that Yahoo's users come first. That is a big change from the old Yahoo, which was famous for loading its websites with advertising that critics said were overly intrusive and detrimental to the user experience.
 
For instance, Yahoo's new mobile weather app, which takes basic weather feeds and links them with the Flickr photo-sharing service, has sparked interest from advertisers. The app could be particularly appealing to hotel and retail marketers, said Peter Stein, CEO of Razorfish, a digital marketing agency.
 
So far however, Yahoo has kept the weather app ad-free.
 
“There message has been very direct and on point, they are definitely focused on the consumer,” said Ari Bluman, chief digital investment officer in North America for WPP's  media buying arm GroupM.
 
Consumers first
 
Some ad experts say Mayer's prioritization of users before advertisers is a smart move that could ultimately pay off by increasing Yahoo's popularity with consumers. But others say it may not go over well on Madison Avenue in the short term.
 
For instance, Yahoo did a major overhaul of its popular sports home page to coincide with the start of the NFL season this year. One advertising agency executive said they found out about the change a week before the launch, and so the agency had to scramble to re-design ads that would fit with the new format.
 
“Our client was very upset,” said the executive, who did not want to be identified because the agency works closely with Yahoo. “I have a six-page typed memo about the problems we had with Yahoo and this one client.”
 
A Yahoo representative said that the company has “moved faster in the past year than anytime in our recent history” to launch better products and to “evolve” the ads on its websites. “We think this will improve performance for our advertisers over time, and we're working closely with our advertising partners.”
 
Still, the overall assessment of Mayer is positive.
 
Tamara Bousquet, senior vice president of media at digital marketing agency DigitasLBi, recalled a dinner she attended in late September with other advertising executives where Yahoo was the topic of conversation. “Every single person around that table thought the company was handled better since Marissa came on board,” she said.

You May Like

Anti-Terror Drills Highlight China’s Push Into Central Asia

China, Russia, several central Asian countries wrap up massive anti terrorism military drills in Inner Mongolia More

Erdogan’s First Step: Secure More Power in New Role in Turkey

Erdogan was sworn in as Turkey's first popularly elected president on Thursday; he picked former foreign minister Ahmet Davutoglu as PM More

Pakistan Army Fails to Break Political Deadlock

PM Sharif claims he didn't ask army to defuse crisis; military rejects claim More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ukraine Battles Pro-Russia Rebel Assaulti
X
Daniel Schearf
August 29, 2014 9:30 PM
After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.