OK so Yahoo had what a lot of folks described as a good 3Q earnings. I saw some good write ups by some of my favorite bloggers/reporters including:
- Kara Swisher with Day 92: Oh Joyous Day
- Kate Kaye with Yahoo Shows Signs of Display Ad Growth in 3Q
- BusinessWeek with Yahoo manages an upside surprise for now
My key takeaways from these post are:
- Yahoo's top three strategies are being a top destination for consumers, creating an open platform, and being a killer ad network
- Pursuing a strategy of increasing out of Yahoo property impressions
- Revenue per search was up 20%
Couple those with my excitement (really) about getting my first proposal from Yahoo with RightMedia in a plan and you can definitely see Yahoo's ad growth strategy. The RightMedia acquisition is important because it gets you access to top 100 sites on the internet in your ad buy along with Yahoo properties. The platform also allows for variable CPM bidding and if you put one of their tracking pixels on your conversion pages, you can have the RightMedia team optimize your CPMs to fit your CPA metrics. Why is this important? Well if Google has an Achilles heel it is on the content side.
On the search side, Google is right now almost too dominant and even though Yahoo is making moves to improve both their paid search product for advertisers, for themselves, as well as user experience, they are way behind. For example, one of those links shows how they just announced that you can block domains on the content side, but can only limit it to 250. 250? For one of my main accounts, I have over 2000 blocked domains and add more in every week. On the Panama side, after a sluggish start for my search campaigns, I started seeing nice increases in ROI recently, so I've been steadily increasing spends. Yahoo still does not allow for video or display ads to run on their content which is a real shame, but that has to be coming right?
While I've become a great fan of Google's content network in the last 2 years especially for smaller advertisers who can't afford to go direct, it is the one area where Google is vulnerable. Google has some nice sites like YouTube, MySpace, NY Times, Boston.com and many many others. However, one has to wonder how good those ad positions are and how likely the ad space is going to have a Google ad served there instead of a direct or other network sale. Most publishers probably have Google as a default ad filler and it is either third or fourth in line behind direct, BT network, and an Ad.com network. A content buy on Google might get you 80% of the internet if the price is right and if the space is available; even then who knows how premium the position is.
So where can Yahoo attack them? On the display ad side by bringing better publishers, better inventory, and of course better positions. Yahoo isn't leading with search, but leading with their strength which has always been display ads, video streams, and now they are adding in out of property inventory. Once they get search built up to an acceptable level and figure out what their social networking plan is, they'll be right back in the game (from an analyst perspective).