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

How to Safeguard Your Mobile Privacy

As the digital world becomes more mobile, so too do concerns about eroding privacy and increased hacking More

'Desert Dancer' Chronicles Iranian Underground Dance Troupe

Film by Richard Raymond is based on true story of Afshin Ghaffarian and his friends More

Obesity Poses Complex Problem

Professor warns of obesity’s worldwide health impact More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam Wari
X
Katherine Gypson
May 25, 2015 1:32 AM
For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam War

For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Female American Soldiers: Healing Through Filmmaking

According to the United States Defense Department, there are more than 200-thousand women serving in the U.S. Armed Forces.  Like their male counterparts, females have experiences that can be very traumatic.  VOA's Bernard Shusman tells us about a program that is helping some American women in the military heal through filmmaking.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.
Video

Video On Film: How Dance Defies Iran's Political Oppression

'Desert Dancer' by filmmaker Richard Raymond is based on the true story of a group of young Iranians, who form an underground dance troupe in the Islamic Republic of Iran. This is the latest in a genre of films that focus on dance as a form of freedom of expression against political oppression and social injustice. VOA’s Penelope Poulou has more.
Video

Video Turkey's Ruling Party Trying to Lure Voters in Opposition Stronghold

Turkey’s AK (Justice and Development) Party is seeking a fourth successive general election victory, with the goal of securing two-thirds of the seats in Parliament to rewrite the constitution and change the country's parliamentary system into a presidential one. To achieve that, the party will need to win seats in opposition strongholds like the western city of Izmir. Dorian Jones reports.
Video

Video Millions Flock to Ethiopia Polls

Millions of Ethiopians cast their votes Sunday in the first national election since the 2012 death of longtime leader Meles Zenawi. Mr. Meles' party, the Ethiopian People's Revolutionary Democratic Front, is almost certain of victory again. VOA's Anita Powell reports from Addis Ababa.
Video

Video Scientists Testing Space Propulsion by Light

Can the sun - the heart of our solar system - power a spacecraft to the edge of our solar system? The answer may come from a just-launched small satellite designed to test the efficiency of solar sail propulsion. Once deployed, its large sail will catch the so-called solar wind and slowly reach what scientists hope to be substantial speed. VOA’s George Putic reports.
Video

Video FIFA Trains Somali Referees

As stability returns to the once lawless nation of Somalia, the world football governing body, FIFA, is helping to rebuild the country’s sport sector by training referees as well as its young footballers. Abdulaziz Billow has more from Mogadishu.
Video

Video With US Child Obesity Rates on the Rise, Program Promotes Health Eating

In its fifth year, FoodCorps puts more than 180 young Americans into 500 schools across the United States, where they focus on teaching students about nutrition, engaging them with hands-on activities, and improving their access to healthy foods whether in the cafeteria or the greater community. Aru Pande has more.
Video

Video Virginia Neighborhood Draws People to Nostalgic Main Street

In the U.S., people used to grow up in small towns with a main street lined by family-owned shops and restaurants. Today, however, many main streets are worn down and empty because shoppers have been lured away by shopping malls. But in the Del Ray neighborhood of Alexandria, Virginia, main street is thriving. VOA’s Deborah Block reports it has a nostalgic feel with its small restaurants and unique stores.

VOA Blogs

World Currencies

EUR
USD
0.9109
JPY
USD
121.50
GBP
USD
0.6467
CAD
USD
1.2293
INR
USD
63.559

Rates may not be current.