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

Photogallery Americans Celebrate Thanksgiving With Feasts, Festivities

Holiday traditions include turkey dinners, 'turkey trots,' American-style football and New York parade with giant balloons More

Video For Obama, Ferguson Violence is a Personal Issue

With two years left in term, analysts say, president has less to lose by taking conversation on race further More

Video Italian Espresso Expands Into Space

When Italian astronaut Samantha Cristoforetti headed for the ISS, her countrymen worried how she would survive six months drinking only instant coffee More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Community Kicks Off Thanksgiving With Paradei
X
Anush Avetisyan
November 26, 2014 10:57 PM
Thursday is Thanksgiving in the United States, a holiday whose roots go back to the country's earliest days as a British colony. One way Americans celebrate the occasion is with parades. Anush Avetisyan takes us to one such event on the day before Thanksgiving near Washington, where a community's diversity is on display. Joy Wagner narrates
Video

Video US Community Kicks Off Thanksgiving With Parade

Thursday is Thanksgiving in the United States, a holiday whose roots go back to the country's earliest days as a British colony. One way Americans celebrate the occasion is with parades. Anush Avetisyan takes us to one such event on the day before Thanksgiving near Washington, where a community's diversity is on display. Joy Wagner narrates
Video

Video For Obama, Ferguson Violence is a Personal Issue

Throughout the crisis in Ferguson, Missouri, President Barack Obama has urged calm, restraint and respect for the rule of law. But the events in Ferguson have prompted him to call — more openly than he has before — for profound changes to end the racism and distrust that he believes still exists between whites and blacks in the United States. VOA White House correspondent Luis Ramirez reports.
Video

Video Online Magazine Gets Kids Discussing Big Questions

Teen culture in America is often criticized for being superficial. But an online magazine has been encouraging some teenagers to explore deeper issues, and rewarding their efforts. VOA religion reporter Jerome Socolovsky went to this year’s Kidspirit awards ceremony in New York.
Video

Video Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Change

Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Mali Attempts to Shut Down Ebola Transmission Chain

Senegal and Nigeria were able to stop small Ebola outbreaks by closely monitoring those who had contact with the sick person and quickly isolating anyone with symptoms. Mali is now scrambling to do the same. VOA’s Anne Look reports from Mali on what the country is doing to shut down the chain of transmission.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8016
JPY
USD
117.76
GBP
USD
0.6340
CAD
USD
1.1268
INR
USD
61.850

Rates may not be current.