Back to the Future: Yahoo

Yahoo Nick HughIt may surprise some readers to hear that when we started Mobile Marketing mag in 2005, Yahoo was one of the prime movers in mobile, organising numerous seminars and workshops with the aim of educating brands and agencies about this brave new world. And this, remember, was a couple of years before the iPhone saw the light of day and brands really started waking up to mobile.

But then, Yahoo seemed to go cold on mobile, and arguably lots its sense of purpose in life. Under Marissa Mayer, of course, that sense of purpose is well and truly back, and mobile is at the heart of it.

“Mobile is the key to our future,” says Nick Hugh, VP & GM, Advertising at Yahoo (EMEA) early in our conversation. “You might have heard Marissa talk about us being a mobile-first company. We do a revenue review on a weekly basis, we always start with mobile because mobile is front and centre and core to our strategy.”

And if mobile is core to Yahoo’s strategy, programmatic is a key part of that. “Programmatic is critical for us; it’s an area as a business where we are investing heavily,” says Hugh. “We have been pushing programmatic for a long time, in fact. It’s interesting how it has now gone mainstream, how everyone is trying to understand it, agencies and clients too all trying to get up to speed, because it’s become so central to advertising as a whole, and when you look at the moves on the trading desk side and integration into opcos and agencies, it’s clear that it is the future and it is here to say.”

In fact, Yahoo plans to make all its inventory available programmatically through Yahoo Ad Manager Plus. “It will be the first DSP with open access to all Yahoo’s data to inform targeting, and will access all the supply across the web,” says Hugh. “Ad Manager Plus launched a year ago and 95 per cent of the audience targeting business has now been migrated to the new platform, with the rest to follow in the next few weeks. We have signed up a few trading desks and advertisers and there are many more to come.”

So what sort of data are we talking about? “There are a multitude of data inputs, but the main ones are search data at the query level, rather than post-click,” says Hugh. “It’s very valuable data and only a couple of players have that. Secondly of course, we run a large email platform. In the first eight months of last year, receipts for goods bought online totalling $11.5bn were sent to Yahoo Mail users and there’s a lot of data in that, added to the standard info we get from what they do while they are on Yahoo and this is all obviously PII compliant.

“In addition to that, we bought Flurry in July. They have an analytics platform for app providers and the true value sits in the data it captures, and as consumption moves more to mobile and in-app, this generates a lot of information that’s available for targeting. Also, because we have registered users across mobile and desktop for Flickr, email etc., that enables us to understand them across devices and do true cross-device targeting.”

The cross-device thing is interesting. When the subject comes up, people tend to talk about Facebook and Google having a head start in terms of having logged-in users. Clearly, Hugh believes that Yahoo should be mentioned in the same breath.

“Yahoo is definitely in there with Google and Facebook,” he says. “We have 575m users accessing our properties on mobile out of a total of 1bn and a high proportion of these are logged in. It’s one of the key reasons people are so interested in licensing Yahoo Ad Manager Plus. Also, Flurry gives us a major advantage because it drives cross-device targeting and gives us information about what people are doing in-app outside of Yahoo.
Flurry is just one of a number of companies Yahoo has bought over the past couple of years. One of the other notable acquisitions was that of video ad firm Brightroll last November for $640m (£426m). Hugh says the deal was a natural one, given Yahoo’s stated intentions about its future plans.

“Video is the biggest and fastest growing ad medium and it represents a key part of our forward-looking strategy,” he says. “In fact, a few months ago in an announcement to Wall Street, we coined a new acronym, MAVENS, which stands for Mobile, Video, Native and Social, which are our four key priorities, all executed programmatically. Between 2012 and 2014 we have grown our revenues from these from nothing to $1.1bn out of $5bn, and they are growing triple-digit for us year-on-year.

Native is also increasingly important to Yahoo. “We believe the future of advertising on mobile is about experiences that are seamless for the consumer from a content and advertising perspective, so if look at any of the Yahoo apps or on mobile web, the ad experience is almost entirely native, because it’s the only type of advertising you truly touch,” says Hugh. “Native has been incredibly successful for us since we launched it last May and constitutes a significant part of our business these days. The performance is also generally better than display advertising. When you talk about mobile in fact, native is the key focus for us.”

Nick Hugh is VP & GM, Advertising at Yahoo (EMEA)