Ad Dollars Haven't Followed Yahoo's Mobile Moves
Marissa Mayer is nothing if not disciplined in articulating her vision for reviving Yahoo’s fortunes by making it part of people’s “daily habits.” Central to that strategy is mobile, and the Yahoo CEO has often noted that common mobile activities like checking mail, news, sports scores and stocks align neatly with Yahoo’s core offerings.
She hasn’t just been all talk. During Mayer’s 15 months in charge, Yahoo has made more than 21 acquisitions, many with an eye toward enhancing its mobile capabilities. The biggest bet by far has been the $1 billion out on social blogging service Tumblr, which has a strong mobile presence.
In tandem with the rapid-fire deal-making, Yahoo has focused on redesigning key apps, including Flickr, Mail and Weather. It also recently relaunched its main Yahoo app and several of its sites across the desktop and mobile like Sports, Movies and omg.
Those steps and Mayer’s high-publicity campaign to reboot Yahoo as a mobile company haven’t been lost on Madison Avenue. Agency executives welcome her efforts to revitalize the Web giant and challenge the growing dominance of Google and Facebook in mobile and display advertising. They’re also impressed with Yahoo’s enhanced mobile and Web properties.
But the admiration has not yet translated into increased business with Yahoo. That’s mainly because they don’t find the upgrades on the content side matched yet on the ad side. “We continue to need to see some additional innovation and better ad products in the marketplace,” noted Chia Chen, who leads Digitas’ mobile practice.
The company’s primary new ad product, on both the desktop and mobile, has been the Stream Ad -- its native ad format that runs in the infinite-scroll feed. That was more a matter of catching up with other sites, like Facebook and Twitter, than breaking new ground. So far, the rollout of the in-stream ads in mobile has been limited.
Beyond any new ad formats, Yahoo has also been touting its ability to reach logged-in users across platforms. A recent Yahoo trade ad promoting it mobile ad services highlights capabilities like “cross-screen sequencing,” targeting in-market consumers in mobile, and being able to create location-targeted ads.
With its huge audience, it’s no surprise that Yahoo is highlighting the ability to target users across screens. Last month, it passed 800 million active users, including 350 million from mobile devices. “Yahoo does have a single sign-on across search, sports, finance -- and to their credit, they do have leading products in those areas,” noted Jonathan Adams, senior vice president, media, North America at iCrossing.
But in testing, Chen said the promise of that cross-device data has not panned out. He indicated that the number of Yahoo users that can be tracked across desktop and mobile is much smaller than its overall user base would suggest. “So the question is whether the people who use the desktop don’t use mobile properties as much,” he said.
Within mobile alone, Yahoo faces a challenge driving traffic to less popular properties.
The native Stocks and Weather apps in iOS -- powered by Yahoo -- were the only Yahoo apps among the top 15 in terms of reach, according to comScore figures as of July. Google had five, including Gmail, and Facebook, three including Instagram. Facebook’s main app was also easily the most pervasive, with 76% reach compared to 31% and 25%, respectively, for Yahoo’s Stocks and Weather apps.
Across both apps and the mobile Web, Yahoo is a close third, with 81.7% reach compared to 92.6% for Google and 86.3% for Facebook, per comScore. But the research firm points out that apps represent the majority of mobile time spent versus the mobile Web, at 86% to 14% on smartphones, and 78% to 22% on tablets.
Regardless of rankings, ad execs share an appreciation for how Yahoo has updated key products. Rich Guest, president, U.S. operations, Tribal Worldwide, said the redesign of the Weather app “fundamentally changed my perception of Yahoo because it was so different from what they’ve done before.” Ditto for the revamped Flickr app.
The content overhaul has rekindled client interest, according to Guest. “I’ve seen a lot more senior-level client interest in having deep dives with Yahoo than has happened over the last five years,” he said. “What’s really changed the perception is the work they’re doing in the mobile space.”
Aside from crisp graphics and Flickr photos, what also makes the Weather app visually appealing is what it’s missing: advertising. Compare that to The Weather Channel app, with its persistent banner ad at the bottom of the screen, and pre-roll video ads.
If Yahoo has been slow to introduce ads on its updated apps, it’s no different than companies like Facebook, Twitter, Tumblr and Instagram that have also been wary of alienating users by turning on the ad spigot. But as a mature, publicly traded company, Yahoo can’t necessarily expect the same leeway as a rapidly growing startup.
That’s why it needs agencies and brands to back up their encouragement with actual ad dollars.
“Mobile spend on Yahoo is still nowhere near where we could be spending with them,” acknowledged Gabriel Cheng, media director, M&C Saatchi Mobile. But he expressed confidence that the company in the coming months would debut more data-driven ad opportunities to complement its content development.
Mayer indicated in May the company plans to expand advertising on Tumblr, which only began running ads in users’ feeds earlier this year. At the same time, the Yahoo CEO has counseled patience in public statements, saying at an industry conference last month that turning around Yahoo will take “three to four years.”
That’s a long time in the digital world. “When you look at how quickly mobile is growing as a percentage of media budgets…I wonder whether the time horizon is really more like 12 to 18 months,” said Digitas’ Chen.