Yahoo Will Shell out $100M to Promote Its Brand and Products
Yahoo will spend more than US$100 million over the next 15 months to aggressively promote its brand and products globally, the company's CEO, Carol Bartz, said on Tuesday.
The ad campaign's goal is to drive home the message that Yahoo wants to be the center of people's lives online. The marketing message centers around the word "you," making a play on Yahoo's iconic "Y" in phrases like "It starts with You" and "It's You."
Although Yahoo Web sites and online services already attract massive amounts of Web visitors, this campaign is necessary to make sure people are aware of recent enhancements to key products, like its home page, search engine and Webmail service.
Specifically, Yahoo wants to promote new social-networking, personalization and third-party integration features across several of its core services, which company executives feel make Yahoo an ideal central hub for people to manage their online experience.
In concept, this isn't too far removed from Yahoo's original mission when it was created by Jerry Yang and David Filo in the mid-1990s as a Web site directory, Bartz said at a press conference in New York City.
"This is a highly evolved [version of] the same concept. Now the Internet is even bigger and more scrambled eggs, and how can you organize your life and have it your way?" she said during the event, which was webcast.
"We're just taking it farther than it's been by having it really feel coordinated the way you want it ... so that it feels like an integrated experience for you," she added.
Launching on Monday in the U.S. and starting its rollout abroad on Oct. 5, this will be Yahoo's first global brand campaign, said Elisa Steele, Yahoo's chief marketing officer.
The campaign will stress what Yahoo considers its competitive strength: offering services to manage personal matters, like sharing photos and exchanging e-mails, as well as to stay informed and engaged when big news happens.
"It's the combination of my world and the world that we look at as the intersection of Yahoo's corporate position. It's where we believe we can own and deliver a unique and differentiated experience in a way no one else can," Steele said.
From a marketing perspective, Yahoo plans to say all the right things, such as stressing social-networking features and personalization, but it may fall short of the campaign's promise, an analyst said.
"Yahoo has a lot of successful sites and services and strong usage, but to close the gap between the campaign rhetoric and what they have, they'll have to step up in certain areas and deliver some best-in-class products," said industry analyst Greg Sterling from Sterling Market Intelligence. "The campaign itself won't do much if Yahoo can't back up its promise with the actual experience."
In its thrust to be the preferred hub for people's online experience, Yahoo, like other traditional portals such as AOL, faces a tough competitor in Facebook, which has fast become the Web's starting point for many of its now 300 million members, Sterling said.
"Facebook has moved into that role for a lot of people and encroached on that space," he said. "It's not a portal and doesn't have all that functionality, but it has gotten a lot of the mindshare Yahoo used to have."
Gartner analyst Andrew Young also expressed the concern that Yahoo may not have enough oomph in its roster of services to back up the interest the campaign generates.
"A campaign of this size will put enormous pressure on the company to fulfill and exceed people's expectations for how these services will change their experience, opinions and relationships with Yahoo," Young said.
"I don't know if Yahoo has the goods. Yahoo has to go beyond where it is today to fulfill the campaign's promise," he added.
For example, to truly be the central place from where people manage their lives online, Yahoo needs to let people manage all their online identities and social networking interactions on and off Yahoo.
"There are many things that can be done to make the world of social networking more convenient and empowering for people. There are plenty of things Yahoo could do," Frank said.
Bartz declined to comment about recent reports that Yahoo is looking to sell its Zimbra communication and collaboration suite for businesses, whose technology has been used to enhance Yahoo Mail.
In general, she said Yahoo will either sell or shut down any of its products or units that aren't aligned with the company's strategy of being the center of people's Web experience.
The campaign seems to be in line with Bartz's push since taking over as CEO in January to streamline and clarify Yahoo's structure and focus.
In recent years, Yahoo has regularly delivered disappointing financial results and has been criticized for lacking a technology edge, failing to capitalize on many big opportunities like search, video and social networking.
Yahoo also starred in an 18-month corporate soap opera with Microsoft, as the latter tried unsuccessfully to acquire Yahoo before the companies struck a search advertising deal in July.
That deal, which is awaiting regulatory approval, calls for Microsoft's Bing search engine to be the exclusive algorithmic search and paid search platform for Yahoo sites, and for Yahoo to sell premium search-advertising services for both companies.