Home Page Ads Vary: Yahoo Declines, YouTube Diversifies Base

Yahoo debuted a redesigned home page earlier this year featuring a Twitter-like news feed and a less cluttered look. But the revamp didn’t lead to improved ad performance in the second quarter, according to Macquarie Securities, which charted home page advertising on the major Web portals.
The report found that the proportion of oversize and custom ad units -- used as a proxy for tracking ad health -- had declined to 24% of total home page ads in the most recent quarter from 28% a year ago, and in the first quarter of 2013. Furthermore, the share of brand-focused ads was cut in half, falling to 20% from 39% a year ago, and in the prior quarter.
Advertising on Yahoo’s log-in page has also seen a steep decline -- with sell-through dropping to 44% of days in the second quarter compared to 65% a year ago, and 65% in the first quarter. It also marks the lowest level since the 38% sell-through in the second quarter of 2011.
One factor possibly offsetting the dip in higher-priced display ads is the recent ramping of advertising in Yahoo’s news feed. Further details about Yahoo’s display ad results will become clear when it reports quarterly earnings next Tuesday.
The ad picture was mixed for the other portals tracked by Macquarie. AOL showed strong gains in the quarter from a year ago, with sales of oversized/custom ads at 51%, up from 24%. While down from 55% in the first quarter, that was an all-time high for AOL. The share of purely brand-oriented ads were flat from a year earlier, and in the first quarter, at 29%.
YouTube, meanwhile, continued to diversify its advertiser base beyond media companies in the second quarter. The media segment fell to 35% from 52% a year ago -- and 38% in Q1 -- as the video hub attracted relatively higher spending across verticals, including CPG, financial services, food and beverage, and automotive.
Ad quality remains consistently high on YouTube, with its oversized masthead unit selling out 82% of days in Q2 versus 79% a year ago, and 87% in Q1.
Home page advertising for Amazon is going in the other direction. The Web retail giant has shifted dramatically toward house ads in the first half of 2013, with ads for Amazon Prime and its Instant Video Service accounting for 79% of all ads on its main page in the second quarter. That’s up from just 1% a year earlier.
“However, despite the move away from third-party advertising on Amazon’s home page, we continue to believe that, over time, AMZN has meaningful plans to ramp its display advertising business -- not only on its own sites, but on third-party sites as well,” wrote Macquarie analyst Ben Schachter.
As with AOL, results for MSN showed significant improvement from a year ago, with oversized/custom ads making up 40% of all home page units versus 20% in the year-earlier period. But that was down from the historic high of 56% in the first quarter.
While brand-focused ads dropped to 17% from 41% a year ago, Schachter attributed the decline to a larger share of ads, including both branding and a call-to-action. Shares of these hybrid units increased to 59% from 33% a year ago.
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