By Maria Loreto | Media Planner
Marissa Mayer’s choices have been under the microscope ever since she left Google to head its major rival, Yahoo. Despite criticism over some of Mayer’s major decisions concerning Yahoo’s operations, I find her strategic moves both smart and interesting. She appears to be repositioning Yahoo as an online media buyer’s dream – a company that places a greater focus on ad-tech investment and development while still delivering a huge number of quality impressions, something that has always been a core strength at Yahoo.
Mayer initiated her grand plan to change the tech behemoth’s image as a slow, out-of-date Internet giant when she lead the company’s partnership with arch-rival Google (her former employer) for display advertising.
But she took the change-now, change-big plan one step further last month with the surprise announcement of Yahoo’s acquisition of Tumblr. By acquiring the most influential microblogging site in the United States (Tumblr hosts more than 112 million blogs and almost 60 billion posts per month), Mayer laid down the future of Yahoo. It’s a future built around smart online advertising opportunities and digital content.
So what does the acquisition mean for Yahoo?
First, it shows that Yahoo understands the value of display advertising, which will be Marissa Mayer’s first bet at monetizing Tumblr despite users’ aversion to ads on the site. Display, a traffic source often underestimated by marketers, has developed dramatically over the last couple of years even outperforming traditional paid search in certain verticals. Furthermore, Google’s paid search cost-per-clicks often turn out to be too expensive for certain industries, pushing advertisers to explore other traffic options in order to pay more efficient cost-per-acquisitions.
Second, given that approximately 40% of Tumblr’s users access the site via their smartphones, the acquisition opens up new opportunities for Yahoo to expand its mobile presence. Tumblr’s users belong to a younger demographic that truly engages with mobile apps and mobile content. Yahoo could use the experience of the Tumblr team in building and growing a mobile audience and carry it over to its other properties in order to become a big player in the mobile space.
Yahoo will make use of Tumblr’s user database to serve ads that are relevant to each microblog’s owner and respective readers – ads will be served, not only based on interests and content, but also on whom these individuals are. Furthermore, the content that prevails on the microblogging platform – travel, entertainment, food , etc. – doesn’t overlap with the content currently displayed on Yahoo’s most trafficked properties (sports, news, finance), giving the search giant more opportunities for monetization.
Finally, this decision puts Yahoo in the news once again, this time as a company that is rebranding itself as hip and current in an attempt to get rid of the ‘old search engine’ image that it currently holds.
Overall, I see this as a smart move that brings Yahoo more data: the acquisition will give the company access to 300 million unique users per month, something that aligns with Mayer’s primary goal of increasing the company’s revenues by growing Yahoo’s impressions, page views and user interactions.
The challenge: How will Yahoo monetize this traffic without scaring Tumblr loyal users away? Will it find a way to monetize display and mobile ads as well as Mayer’s former employer? I believe it is possible, but we will have to stay tuned.Do you think Yahoo will be able to meet the challenges this acquisition will bring? Let us know on twitter @MediaWhizInc