Last fall, Yahoo launched a huge, terrible offline ad campaign that cost $100+ million. It flopped. So Yahoo fired its ad agency, Ogilvy, and hired a new one, Goodby Silverstein. And now Yahoo is launching another $85 million campaign.
The new campaign is better–it actually gets at why some people still use Yahoo (start page)–but it will also likely flop.
Because in the history of the Internet, offline advertising has never really made much of a difference in building a sustainable online audience.
That’s why Google has never really advertised (and is now bigger than Yahoo). That’s why Facebook has never really advertised (and is now bigger than Yahoo). That’s why Wikipedia has never really advertised (and is the fifth biggest site on the planet, with no content costs, and is still growing like a weed). That’s why Amazon basically stopped advertising (and is still growing like a weed).
Now, Carol Bartz comes from a business in which offline advertising does work (or at least did work, before so much of the target audience moved online). And since Carol is new to the consumer Internet business, we imagine it seems intuitive to her that offline advertising will work (after all, Walmart advertises!). In other words, we imagine that Carol Bartz is following in the footsteps of all those CEOs of new consumer Internet companies in the late 1990s who believed that plastering their ads all over TV, radio, billboards, etc, would build a huge, sustainable audience. It seemed intuitive. It just didn’t work.
We’re just guessing, but we also imagine that Yahoo’s new ad agency, Goodby, didn’t explain that to Carol. Otherwise Carol would have spent the $85 million on product development or online ads or Google keywords or something.
And we can understand why Goodby wouldn’t have explained that to Carol, because, if it had, Goodby wouldn’t have been able to collect $10+ million in fees.
But someone should tell Carol. Because Yahoo’s collapsing traffic is a major problem. And spending money on advertising just isn’t going to fix it.