BRAND SPEND ANALYSIS: Yahoo!’s TV-based strategy is helping to maintain the web brand’s high profile

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.

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

US.



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

products.





Research by AC Nielsen MMS tel: 01344-627553 www.mediamonitoring.com.



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