Last year Yahoo’s CEO Marissa Mayer addressed over 500 advertising companies at an event during Advertising Week, reassuring them that Yahoo was a great choice for ads, and that they was progressing forward. She even referred to Yahoo as “the world’s largest start-up.” An odd phrase considering the company is almost 22 years old, with an emphasis on the old.
Yahoo feels like a brand that has had it’s day, yesterday’s hot shot is now today’s has been. Cruel words but that’s the problem with a brand that seems to have lost its way and not invested enough in the right creativity, successful innovation or in marketing itself well. Even it’s logo looks out dated and tired.
Despite numerous acquisitions, like Tumblr and Flickr, as well as hiring lots of talent, they have failed to excite anyone with the next big thing. Or even the current thing.
However, despite the brand looking about as exciting as the Post office, as a business it’s performance is mixed, they have delivered over $50bn back to shareholders, which is impressive. It still has a brand value over $6bn, even though it has seen share value drop 40%.
One of the big issues is exactly what businesses the brand represents? There are over 30 different branded Yahoo businesses, 4 unique branded businesses and over 50 they have closed down. And then there’s the big Chinese e-commerce company Alibaba which they have a 15.4% share in, worth about $40bn, which they can’t seem to make up their mind about what to do with.
Its online properties are some of the most visited sites in the world, with hundreds of millions of visitors – over 700m a month to its news site, Tumblr has over 100m members. But its problem is it lags way behind Google, which dominates, and even behind Microsoft’s Bing.
At one point, around 2000, Google and Yahoo were neck and neck, now they aren’t even in the same ballpark. Google is estimated to be worth 14 times as much as Yahoo.
Marissa Mayer has been running the company for 3 years, which is longer than most previous CEOs, and has recently seen an alarming number of top people leave, including her head of marketing, which suggests that all is not well.
As the face of the company, she has had both praise and a fair amount of criticism and there are suggestions, as she has just had twins, that she’ll soon step down. The problem is, does anyone want the job? Yahoo is not a sexy brand anymore, it’s seen as failing and who wants to captain a sinking ship? So finding a leader to turn the brand around is not looking good.
So how strong is the brand still depends on who you talk to.
Advertising is a shallow business, so image counts for a lot. Who is going to get excited when they see Yahoo on any schedule? No wonder it’s seen a massive decline in its core business of selling ads. Add to that the problem of dramatic growth of ad blockers putting brands off spending on digital. Though it has seen an increase in revenue from mobile, social, native and video, but this represents only 20% of the business, which is too little, too late.
For the millennial crowd it’s irrelevant because they have failed to engage the next generation on. Even Snapchat has thrown them off their Discovery feature because it felt they were out of touch and failed to connect with Snapchat’s younger users (18-24).
For the City, it is still a valuable company and all eyes are on its shares in Alibaba. But City investors are unsure of Yahoo’s current performance and feel it has to sort itself out and needs to “fix a lot of things” to get back on track. If that is at all possible.
As for the media, well they haven’t had anything exciting to say about them for years. And that’s the problem, there really isn’t anything exciting about the brand.
In rankings, it’s fallen out of the Brandz top 100, Google is No 2.
As a brand Yahoo is boring, yet by contrast Google is exciting, dynamic and is seen as an innovative brand that is on the cutting edge, not bad for a glorified search engine. That’s’ the power of a great creative ethos and good marketing. We’d all love to win a week on the Google Campus, but how many of us would want to go to the Yahoo Campus? It’s like comparing the California coast with Butlins.
There are many opinions about where Yahoo goes next, Yahoo are hoping the appointment of McKinsey & Co will give them the answers, but I really doubt it, all they’ll get is a big bill.
The brand may simply be too far gone. If it had invested in better media relations, better marketing, a bit of spin and better creativity it would at least be a bit more exciting. Ironic when you consider most of it’s income comes from an industry that does exactly that.
Chris Arnold is a founding partner of Creative Orchestra, Comobi2 and COGLab. He has been a Creative and board Director of Saatchi & Saatchi and the former chair of the DMA Agencies Council and the Creative Council.
He is also a regular blogger on Brand Republic and contributor to Marketing magazine.