Why Bartz Lost

Carol Bartz lost her job recently as a consequence of failing to get Yahoo's advertising revenue growing. How did Yahoo, with all its hundreds of millions of users and billions of page views to sell to advertisers, fail to grow in the last year?  Simple.  It lost the positioning battle, the struggle for a positive place in the minds of advertising buyers, where the bulk of Yahoo's revenue is derived.  Without a positioning that captures the imagination of the market, Yahoo ad revenue flat-lined while it grew for others.

Al Reis and Jack Trout first published the iconic book "Positioning; The Battle for your Mind" in 1980.  Its premise is that customers place brands in a hierarchy of best to worst in their minds, among a list of competitors.  Trout and Reis described a ladder in the brain and said the idea is to define the ladder so your brand can be at the top of it.  If a marketer can control the definition of what matters to the customer, they can then make their brand remembered for being the best at that characteristic.

Successful generals chose their field of battle carefully, forcing their opponent (often even an enemy that outnumbered them) to attack up hill.  Successful marketers of media brands have a more complex problem to solve, though one with less life-or-death consequences.  Media positioning is complex because it must satisfy two constituencies at once: the reader/viewer and the advertiser.  The goal is to define the key reader/viewer/advertisers need that is important in such a way that the media brand can be perceived to be the leader in the metric or value that matters.

The greatest positioning concepts generally tie into something obvious and build on it.  The iconic "Perception-Reality" campaign for Rolling Stone created believability by recognizing the negative perception of the brand and building on it.  That concept is closely related to the even more iconic solution to building on a negative: "We're Number 2 so We Try Harder," which t vaulted Avis from the middle of the pack to close behind number one, leaving the others behind. 

The key to winning any positioning battle is to control the definition of customers' needs.  In media, it's both the users' needs and interests AND the advertisers' needs, a complex and seemingly conflicting demand.  Years ago, the New Yorker separated itself from the pack by making itself singular with "Yes, the New Yorker," telling readers they were unique and stood out from the crowd - a message they liked to hear -- and telling advertisers they really couldn't do without the New Yorker, which stands alone.  Redbook separated itself from the women's service pack for a few years with "The Juggler," emphasizing the pub's editorial support for the working mother and wife who also had more discretionary income than the average homemaker.

The seeds of Yahoo's positioning problem were sown in their first successful positioning of simply being fun.  The tag line "Do you Yahoo?" implied that fun, innovative people, insiders and leaders, use Yahoo and would know what that meant.  It worked for both the audience and the advertisers who provided the revenue stream.  The trouble with positioning like this is that it is like trying to run a night club that is the coolest place to go only -- until the hoi-poi show up and the cool people move on.

The functionality lead that Yahoo had had evaporated. Then first Google, and soon social media site,  captured the top step of the ladder in customers' minds about where fun and innovative people could be reached.   For quite some time now Yahoo has tried to be all things to everyone, a sure way to fail in establishing a positioning that works.  The latest tag, "Science, Art and Scale," tells the tale.  These are conflicting ideas.

Bartz failed to choose the right ground on which to fight. And she failed to hire and support marketing and sales executives who could help her do so.  Meanwhile, Yahoo has company.  Neither AOL nor Microsoft's online advertising business has a positioning that works for them, either. 

All media companies need to be thinking about their positioning.  There are far more competitors in every market niche than ever before.  Hence positioning is more critical than ever to capture and hold customer mind-share.  Companies that are number two or three in their market can capture the high ground by defining what their customers' need in a way that allows them to be at the top of the mental ladder...then building on that. 

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1 comment about "Why Bartz Lost ".
  1. Paula Lynn from Who Else Unlimited , September 15, 2011 at 7:15 p.m.

    At all levels, even some smart people, become more enamored with position rather than doing the job.