Yahoo! has pulled away from the rest of the dotcom pack by making a
profit on European sales generated in the fourth quarter of 1999.
Revenues for the first quarter of 2000 were up 120 per cent on last year
at dollars 228.4 million. About 70 per cent of Yahoo!’s revenue comes
from advertising, the rest from e-commerce.
The internet search engine was launched in April 1994. Today, Yahoo! has
a global audience of 145 million unique users and generates 625 million
page hits a day. Yahoo!’s brand strategy is to position itself as the
only place in the world anyone needs to go to find information, get
connected or buy anything. It offers integrated marketing solutions to
more than 3,565 advertisers and retailers. A deal with Pepsi will put
the Yahoo! logo on 1.5 billion Pepsi labels and in 50,000 stores in the
Agencies: Yahoo! uses Optimedia International for its media planning and
buying. Its last TV campaign was created in the US by Black Rocket.
Fabiola Arredondo is the managing director of Yahoo! Europe.
Total spend and the media mix: In the UK,Yahoo! has experimented with
most advertising media over the past year. The favoured medium is
television, which accounted for 82 per cent of the total spend of pounds
1.16 million for the 12 months to February 2000.
Yahoo! tested cinema and radio in 1999 - advertising ran only from July
to September and June and July respectively. Press advertising was
similarly confined to March-May and August-October. From October to
December, Yahoo! also used door-drops and press inserts to promote its
free webguide, which raises money for Oxfam while users are online.
Spend details: Yahoo!’s TV campaign ran on 14 Astra channels (attracting
a higher proportion of spend than average) and 20 terrestrial stations.
Channel 4 Midlands and Channel 4 South-east took 21 and 15 per cent of
the total pounds 948,527 spend respectively.
Opinion: Lynn Ashman, client services director of direct marketing
agency Tullo Marshall Warren, says: ’Yahoo! is an established player in
the web market and has built a level of brand awareness that must be the
envy of the competition. While other dotcoms are spending huge amounts
to gain market share, Yahoo! has already tested various media and has
sufficient awareness to make television a viable option. The choice of
TV as the prime medium is an obvious one.’
Conclusions: The recent stockmarket shake-out has given investors a
healthy dose of reality. The biggest and longest-established dotcoms
will pull ahead of the me-too rivals that trade mostly on hype and huge
cash balances raised on flotation.
Yahoo! has demonstrated that successful internet companies can turn
losses into profits and its future strategy is certain to include closer
links with mobile telephony and a strong focus on financial
Research by AC Nielsen MMS tel: 01344-627553 www.mediamonitoring.com.