Yahoo: After the hack, where does the brand go now?

Following its latest admission that a data breach in 2013 impacted one billion users, Yahoo needs to act carefully and rethink its data collection strategy or risk losing out on its Verizon deal.

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Yahoo’s brand image is suffering this week after it came under fire for its second data hack attack announcement within a year, and the biggest in history, affecting one billion user accounts.

Details of the newly found 2013 attack came after cyber security experts were looking into a hack from 2014 which hit 500,000 Yahoo accounts.

As a result, the brand’s shares fell 5%, knocking $2bn (£1.61bn) off the company’s value. And rumours abounded that its acquisiton by Verizon, worth $3.9bn (£3.13bn) could be on the line. Verizon has said little, commenting that it will “evaluate” the situation as Yahoo continues its investigation.

READ MORE: The TalkTalk hack shows why every brand must take customer data seriously

Following the news, Yahoo’s buzz score on YouGov’s BrandIndex, a balance of the positive and negative things said about a brand, fell 1.8 points, from 8.7 to 6.9. That is a significantly significant hit to its brand at a time when it can ill afford it.

According to YouGov, it will likely take almost a year for Yahoo’s brand to recover, if previous similar instances are anything to go by. Take telecoms firm TalkTalk. It suffered a hack in October 2015 that led to its buzz score dropping 9 points in the immediate aftermath. It did not get back to pre-hack levels until August 2016.

“We will know soon how hard the hit to Yahoo’s perception will be. However, as TalkTalk’s long road to recovery shows, consumers do not quickly forgive brands that do not fully protect their personal information,” a spokesperson for YouGov tells. Marketing Week.

Data is something that should be treated better than money, like health and safety. And like health and safety it needs to be everyone’s responsibility

Jane Frost, Market Research Society

However, despite the 10 months it took, TalkTalk did recover and Yahoo will hope it can replicate that. But that all depends on how Yahoo deals with the hack and how it communicates the problem to its users.

“Companies bounce back from all sorts of things. The key is how they handle it when they find out and to remedy everything. Consumers understand mistakes happen but it comes down to how the company handles it,” Jane Frost, CEO of the Market Research Society, explains.

According to eMarketer, this year Yahoo is set to capture $2.98bn (£2.39bn) in total digital ad revenue worldwide, a 1.5% of the worldwide digital market. In comparison, Google leads with 32.4% of the market this year. Yahoo’s revenues were already expected to drop next year, by 1.3%. But if it doesn’t deal with the hack it could see a bigger decline.

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“Unless action is taken these breaches will not only continue to happen, but happen with increasing frequency, sadly it’s just not enough of a board-level priority in many cases,” Frost acknowledges.

She continues: “Yahoo need to seriously sit down and do a brand audit rather than just a security audit, to make sure data collection is at its best quality.”

There is concern marketers are leaving data to IT teams and not “respecting” it enough or understand its financial value. Data breaches are also a problem among marketers who are not communicating how customers’ data is being used following surveys and there is a risk of Yahoo and other brand’s reputation’s declining if this is not addressed.

“We need to have a much more upfront attitude to data in regards to collection, gathering and holding. Data is something that should be treated better than money, like health and safety. And like health and safety it needs to be everyone’s responsibility,” Frost says.

Even if it does all that, it is unclear what the future looks like for Yahoo. Verizon had already admitted it was concerned after the first hack, this latest breach could be the final straw.

The Verizon deal had given a firm struggling for relevance a lifeline. Without that, and with revenues dwindling, it is unclear what Yahoo’s next step could be. It has (as evidenced by the hack) hundreds of millions of users and a range of well used services. But given the might of its digital rivals, particularly Google and Facebook, that still might not be enough.

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