Yahoo’s ad numbers up, but prices down

Yahoo CEO Marissa Mayer’s stewardship has led to a modest increase the number of ads it sells, but the price of this inventory continues to decline, after the internet giant posted a 5 per cent year-on-year decrease in revenues. 

Marissa Mayer
Marissa Mayer, Yahoo chief executive, has been attempting to find new digital marketing and ad formats since joining in July 2012

Yahoo posted total revenues of $1.14bn for the three months to 30 September, compared to $1.2bn 12 months earlier, with the total number of ads sold during the period increasing one per cent year-on-year during the period.  

However, it also filed that the overall price-per-ad decreased approximately 7 per cent, with display ads generating $470m during the period, representing a 7 per cent annual decrease, and search ad revenues also falling 8 per cent, generating $435m during the period. 

Mayer was lured away from rival Google in July last year after the company went through a tumultuous period, having been led by three CEOs within the space of a year. 

Since then, Mayer’s stewardship has helped it deliver an upswing in profits, many attribute this primarily to its interest in Chinese web firm Alibaba, but revenue from advertising continues to fall comparatively. 

However, Mayer’s strategy continues to focus on growing Yahoo’s audiences and the number of opportunities for advertisers to buy audience eyeballs, particularly in mobile and social. 

Mayer said: “In Q3, we launched new user experiences across many of our digital daily habits – Yahoo Screen, My Yahoo, Fantasy Sports, and more. 

“Now with more than 800 million monthly users on Yahoo – up 20 per cent over the past 15 months – we’re achieving meaningful increases in user engagement and traffic.”

During the last year, Yahoo has spent billions on new platforms, including social blogging service Tumblr, plus advertising and content marketing services, such as Bignoggins, Qwiki, Xobni, Admovate, Ztelic, Lexity, Rockmelt and IQ Engines. 

In an earnings call, Mayer said: “Yahoo is the only place where advertisers can execute Display, Search, mobile, video and native campaigns, both through direct and programmatic means. 

This gives us a strong position in the market and we are investing so we can bring even more value to our clients and partners.”

Mayer subsequently went on to describe how Yahoo plans to transition its advertising offering to brands in a world when digital media consumption is fast-becoming mobile first – something Facebook and Google have struggled to do in the past. 

She said: “Some early experiments have indicated that, while simply porting traditional display to mobile reduces revenue per page view, showing native [in-app] ads on mobile can actually increase revenue per page view. There is a big opportunity ahead to monetise mobile.” 

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