Wall Street Hates Yahoo, But Madison Avenue Still Bleeds Purple

The strongest indictment of Yahoo management yet might be how much Madison Avenue still loves Yahoo inventory: When your customers love your product, and you still can’t sell it, it’s time to look in the mirror.

If the agencies hated Yahoo — thought it was dinosaur like AOL, a trash heap like MySpace, or an enigma like Facebook — then the deceleration of Yahoo’s display advertising revenue growth might be understandable.

But Madison Avenue still bleeds purple, according to an AdAge report:

  • “Yahoo has the greatest scale and the greatest potential as a brand builder in the online world,” says Rob Norman, CEO, Group M Interaction.
  • “Advertisers are looking at where’s the traffic, volume and value is today. And today is very positive for advertisers at Yahoo,” says top online advertiser Scottrade’s chief marketing officer.
  • Chrysler’s top marketer Deborah Wahl Meyers said the carmaker would push its new Dodge Ram on NBC, Fox and Yahoo, calling Yahoo “almost a fifth network.” A Yahoo.com homepage buy is worth four 30-second spots against “Desperate Housewives,” she said.

So why can’t Yahoo do more with all this goodwill? In part, in our opinion, because Yahoo has focused too much energy on trying to mimic Google’s automated sales technology…and has failed to do it.  Yahoo’s strength is display advertising. And display advertising — outside a few specific clients peddling credit card offers, mortgages and ring tones — is not an easily automated business. It’s not about maths, it’s about art.  Selling high-end display solutions will probably always be more expensive than selling search keywords, and Yahoo’s P&L will probably always reflect that.

One of the automaker’s agency-buyers put it best for AdAage:

“The dominant gene in Yahoo is to think of advertising as a maths problem — machines talking to machines,” he said. “If you reduce it to a maths problem, we go to Ad.com.”

See Also: Yahoo Mass Firings December 10, Still Too Few


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