Yahoo! the comeback kid?

One of the internet greats, Yahoo! has since lost ground to the likes of Google and Facebook, but through new ventures, such as a tie-up with Bing, and a refocus of the brand as a content provider, it is planning a resurgence.

Click here to read what other marketers had to ask Elisa Steele, Yahoo! chief marketing officer and Mollie Spilman, senior vice-president of global business-to-business marketing
Click here to read a Q+A with Elisa Steele and Mollie Spilman

Elisa Steele
Elisa Steele: ’We have to put all our muskce behind what we are doing. But there is certainly more work to be done’

The appointment of Elisa Steele as chief marketing officer in March 2009 signalled the start of a new era for Yahoo!. For the first time in years the business would make a concerted effort to define a clear direction, and her arrival set in motion a major brand refresh for Yahoo!.

Around the time of Steele’s appointment to the newly created role, the then new chief executive Carol Bartz told the Financial Times: “Yahoo!’s marketing strategy and teams have become decentralised. Hiring Elisa will quickly mobilise our plan to integrate the function globally.”

Bartz elaborated on her rationale on the company’s blog: “In the past few years, we haven’t been as clear in showing the world what the Yahoo! brand stands for. We’re going to change that. Look for this company’s brand to kick ass again.”

Certainly, a global consumer research project conducted at that time confirmed that consumers did not have a clear understanding of Yahoo!’s identity. And even now, many people are asking, what is Yahoo! for?

Nearly two years on from the brand refresh that included the company’s largest global marketing campaign, the brand is still attempting to answer this question by defining itself around the philosophy “content is king”.

Yahoo! will power a Starbucks in-store web portal that will provide customers with Yahoo! news, entertainment and sport content

It is apt that this phrase was coined by Microsoft founder Bill Gates in 1996, because Microsoft has become a crucial partner to Yahoo!. A deal was struck in June 2009 to move Yahoo!’s back-end search engine technology to Microsoft’s systems as a result of its investment in its new Bing platform. The deal has attracted scepticism from the industry, with some saying that Yahoo!’s lack of investment in its own technology will be to its detriment. Bartz has also had to convince shareholders of the decision, maintaining that the financial benefits will become apparent this year and next as a result of savings from not having to maintain its own system.

“Our advertisers understand the benefits of a common marketplace between Yahoo! and Bing, for example being able to get better search results,” says Steele, defending the partnership. “But we are still responsible for innovation in the way we deliver [search] results and the user experience.”

While this has been taking place, Yahoo! has also been in the process of shedding around 1% of its workforce – around 700 jobs – while rival Google is said to be recruiting for 1,000 new positions in Europe. Steele will not comment on the situation, but Bartz told the media in January that it was a necessary move to “redirect investment to new products and experiences”.

Bartz made this comment at the announcement of the company’s fourth quarter results, in which revenues dropped 4% to $1.2bn (£750, but profits doubled to $312m (£194m), suggesting Yahoo!’s new direction is paying off for the moment.

Q&A

Yahoo! chief marketing officer Elisa Steele and senior vice-president of global business-to-business marketing Mollie Spilman

Marketing Week (MW): Tell me about your roles and how they intertwine?

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Elisa Steele

Elisa Steele (ES): My job is to market both to consumers and to businesses. I have a global head of consumer marketing and a global head of business-to-business, and those teams collaborate strongly because we are a brand that represents consumers around the world. But we also have to translate that brand into what advertisers need and want.

Mollie Spilman (MS): On the consumer side, it’s about getting them to come to Yahoo! and increase their usage. The reason we are able to offer consumers everything we do is because advertising pays for it, so on the business-to-busiess side it’s about generating revenue. My role is to communicate to brands, agencies and publishers, understand their needs, and work with departments such as research and products to fulfil those needs.

MW: What are the challenges of your roles?

MS: We have so many products on the advertiser side, so it’s really hard to communicate the depth and breadth of everything. We want to understand a marketer’s or an agency’s objectives and put together a custom solution rather than telling them to buy this or that. That is something we will focus on even more this year.

ES: The biggest challenge is to stay focused, and to do fewer things better, deeper and more globally. It’s easy to get distracted if you have so many different constituencies, but if we try to do everything we can’t get the scale and results that Yahoo! deserves.

MW: What are your typical days like?

ES: Some days I have my consumer hat on and some my advertiser hat, some my executive hat, some my functional hat. I participate in the planning strategy for the company. Sometimes I’m doing keynotes and interviews, or meeting with customers, and if customers are coming to campus I kill everything else on my agenda. And in between all that I might get a phone call to say that my eight-year-old forgot his lunch. So then you just have to prioritise in the moment.

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Mollie Spilman

MS: My day is split between internal and external meetings – internal is planning products, sales and marketing, and what our goals are for the quarter, year and month; doing post mortems on what we have done and how we can do things better. Externally, I meet with organisations such as the IAB [Internet Advertising Bureau] and support our industry by being part of conversations around privacy standards. I also meet with agencies and clients to get feedback on how we are doing.

MW: How do you build relationships with brands and educate them about what Yahoo! does?

ES: We’ve started hosting some of our biggest customers, from packaged goods to retail, here on the Yahoo! campus. We talk about their business, bring in our scientists, product leaders and marketing teams, and work together to figure out what next steps to take.

MW: How do you communicate to them your proposition against other internet players?

ES: We talk to our advertisers about three things. First the science of how to attract the right consumer for a brand. Then art – how you use this digital canvas to express emotional branding in a way we haven’t been able to in the past. And the third is scale, as we have 600 million global users a month coming to Yahoo!

MS: One of the key strategies is making it simple to understand what we’re offering, what the value is and how you’re going to measure it and reduce the risk from it. If you give a marketer or media buyer all the information to show what it will do for them and how they can track it, then you’re taking some of the risk out because then they’re not just putting the money down without any accountability from Yahoo!.

MW: Will you be communicating the fact that Yahoo!’s search platform will be completely powered by Microsoft’s Bing engine by 2012?

MS: On the b2b side we will. This is hugely important because all the systems are changing. What we have done in the US is email clients to spell out what’s coming. We also do webinars and for big clients we will present to them.

MW: How are you driving the use of mobile as an advertising platform?

MS: Mobile has become more mainstream but the big dollars still aren’t there yet. But just as mobile is getting bigger, here comes social, and marketers are still not increasing their budgets across all these platforms, so these things are in effect competing. Clients might not always want to run a cross-platform campaign but we always include a cross-platform idea for them to consider.

Part of the strategy is providing a Yahoo! experience beyond the usual PC or mobile devices. This is being achieved through digital out-of-home partnerships, and perhaps the most influential of these will be the deal with coffee chain Starbucks, which launches in the UK in early summer. Yahoo! will power a Starbucks in-store web portal that will provide customers with Yahoo! news, entertainment and sport content. The portal will also feature iTunes music and videos, as well as ebooks and children’s activities.

The UK launch may go some way towards giving a much-needed lift to Yahoo!’s UK presence, which is considerably lagging behind the likes of Google and Facebook.

The partnership has attracted attention from other interested brands, and Steele says Yahoo! is in the process of “determining if any of those partnerships will be something that works out”.

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Yahoo! will power a Starbucks in-store web portal

Clearly this direction makes Yahoo! a more desirable platform for advertisers, but it also gives non-internet companies like Starbucks a chance to get involved with digital content.

“It’s an interesting concept in terms of how in the future companies that are not in the internet space, like Starbucks, will use technology to connect with their customers,” notes Steele.

“Starbucks is looking at what consumers want to do while they are having a cup of coffee. For example, it might look at how it can release an iTunes song exclusively through this network because customers might value that.”

While the Starbucks partnership is essentially testing the appetite for this sort of service in UK and European markets, this co-branded strategy is taking off in Yahoo!’s US heartland. There, it has a deal with domestic airline JetBlue to host an onboard Yahoo! channel, and, back in the pure online space, Yahoo!’s fashion and celebrity site The Thread is co-branded by Procter & Gamble’s Herbal Essences shampoo.

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Beckham was not only the face of Yahoo!’s World Cup drive but gave an exclusive interview for its Eurosport portal

Yahoo! is aiming to create more quality content that can make a big impact in multiple channels. For example, last year footballer David Beckham was not only the face of Yahoo!’s global campaign around the World Cup but he gave an exclusive interview to Yahoo!’s Eurosport portal via an online video conference hosted by TV presenter Gabby Logan.

The piece was also linked to Yahoo!’s gaming site. Through a partnership with games developer Zynga, which produces Facebook’s Farmville game, Yahoo! aims to increase its gaming content.

Steele claims Yahoo!’s World Cup activity was “phenomenally successful”, resulting in users spending an extra 14 million minutes on the Yahoo! network. (To put this into context, comScore US results for August 2010 show that people spent 41.1 billion minutes on Facebook, 39.8 billion on Google, and 37.7 billion on Yahoo!.)

It has also fed into Yahoo!’s concept of “Only on Yahoo!”, which aims for greater cultivation and promotion of exclusive content. Steele says about 20% of Yahoo! content is original, but the company is investing in resources to see more of it produced in house.

Its project with actor Ben Stiller, announced at the Cannes Lions Advertising Festival last year, is one example. More than 20 webisodes of a humorous news discussion programme featuring Stiller’s parents, comedy actors Jerry Stiller and Anne Meara, have been produced. Distributed via Yahoo!’s video site, the webisodes have attracted between 7,000 and 150,000 viewers, so there is some scale that needs to be exploited, but this could be fulfilled through partnerships that Steele has already mentioned.

Yahoo!’s benefit over internet giants Google, Facebook, and Twitter to a degree, is clear to the likes of Bartz and Steele

Further fuelling its content strategy, Yahoo! acquired user-generated platform Associated Content last year. It has since rebranded the 320,000 contributor network as the Yahoo! Contributor Network and it suggests suitable content to users based on their online behaviour.

With all these elements in place to drive Yahoo!’s content strategy, the next piece of the puzzle is to push user uptake. Steele says Yahoo! will not only increase its brand exposure outside the home, but will cross-market new products and services to its core user base. This is based on insight that Yahoo! users will typically be loyal to one Yahoo! service and will be unlikely to try another.

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“For example, one user might be loyal to Yahoo! Lifestyle, another to Finance, and another to our email and instant messaging service, but none will cross to other content and services on Yahoo!,” Steele explains. “So we’re working on product sampling to get our loyalists to try another of our content experiences, based on their behavioural data. It’s a multi-channel strategy, of which email with embedded video is a large part. Our conversion rates with this are tremendous, above industry average,” she adds.

Yahoo!’s benefit over internet giants Google, Facebook, and Twitter to a degree, is clear to the likes of Bartz and Steele. But they have a job on their hands convincing consumers and brands, who are more easily able to understand the simple brand propositions of online giants Google and Facebook. Yahoo! faces a challenge in that it has so many varied products to communicate to consumers, brands and agencies. The message to consumers will be around personalised services and exclusive content, while for agencies and brands, Steele says the tack will be breaking the business down to the concepts of “scale, art and science”.

Yahoo!’s senior vice-president of global business-to-business marketing, Mollie Spilman, boldly compares Yahoo!’s capabilities with Google, Facebook and others: “Google has science, but I wouldn’t say it is known for its creativity and art, although it is trying to move more into the display side. Facebook, meanwhile, has scale but it is still figuring out the art and science. MSN has some scale and science but no art. AOL is focused on art but hasn’t invested in technology and its reach is going down. If you take that competitive landscape, Yahoo!’s combination sets us apart,” she claims.

So, if 2009 was about restructuring and a fresh strategy, and 2010 the beginning of new executions, then 2011 should be about seeing things come to fruition while exploring more innovations. Yahoo!’s Connected TV platform, for example, is being developed, with a growing roll call of brand and application developer partners. But while it was demonstrated at the Consumer Electronics Show in Las Vegas in January, mass-market take-up is some way off.

As for how long until Yahoo!’s strategies pay off remains to be seen. As the internet brand attempts to define clearly the point of its portals, Steele acknowledges that although much hard work has been done, the journey is far from over.

“We have put all our muscle behind what we are doing,” says Steele. “Our products, marketing and sales are all lined up with the one mission to deliver that ’Web of One’ – making the internet relevant to one person, different from what the next person wants. But there is certainly more work to be done.”

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Marketer to marketer

Andrew Warner, EMEA senior marketing director at Expedia, asks: After nearly 15 years in the market how will you ensure that Yahoo! stays relevant to the needs of advertisers as the line between content and advertising become blurred?

Mollie Spilman: Yahoo! wants to provide content that will be as informative and engaging as possible to diverse audiences – and to connect our advertisers to those audiences in a way that goes beyond just a standard banner or video ad. Developing new technologies, partnerships and innovations in creative formats are ways we can achieve this.

We have three types of content – our own original content, content we license and crowd-sourced content. We believe in the value of each of these to help advertisers connect to their target audiences in compelling ways.

An example of content we license is the five-minute highlights of the English Premier League. This allows us to bring advertiser messages to core audiences while engaging them with the content that they want when they want it.

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Jessica Reading, head of marketing at Laterooms.com, asks: What does Elisa consider to be her biggest success since her appointment as chief marketing officer, and what would you do differently?

Elisa Steele: I’d say it is bringing the Yahoo! team together to create a truly globally integrated marketing organisation. We have many bright and creative people but allowing them to connect and harness the power of each other across the organisation allows us to develop programmes and initiatives on a much grander level. An example of this is our efforts around the World Cup 2010. Our marketing activities spanned 22 countries with gaming, content, interviews and local events.

What I would do differently is find a way to time travel. There isn’t enough time in the day to be everywhere. I want to be able to blink and arrive in London, Singapore or New York because there is no substitute for being there.

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Women in senior management at Yahoo!

Despite her reputation for dropping the occasional f*** into her public presentations, Yahoo! chief executive Carol Bartz is known for being a consummate business leader.

Along with chief marketing officer Elisa Steele, it means that Yahoo!’s two most public-facing roles are filled by women – something not many companies can claim.

What makes Yahoo! so female-friendly? While Steele and Bartz can hold their own in the boardroom, Steele says women are still outnumbered by men in many departments.

“In our engineering ranks, for example, the pool of women is not what it should be. And there aren’t enough women being prepared to move into those positions,” she notes.

Steele adds that Yahoo! does encourage women to take up careers in the industry through an organisation called Women in Technology. Steele also participated in a mentoring programme through the Fortune Most Powerful Women Summit last year.

“We spend a lot of time mentoring and discussing issues. It’s an important part not just of the advertising industry but of business as a whole,” she says. “If there is anything that women in higher level positions can do to open those doors, it’s our obligation to do that.”

Mollie Spilman, Yahoo! senior vice-president of global business-to-business marketing, adds: “It does feel good to work for a company where a woman is the CEO and who is someone I respect so much. She is one of the reasons I joined.”

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