by • 22 April, 2009 • Media Culture, The CMO ToolkitComments (0)1306

X Yahoo profit plummets 78%; Advertiser minimums fail to curb display decline

Yahoo’s first quarter in 2009 showed drastic  78% profit declines, down to $118 million from $539 million from first quarter 2008.

What’s to blame? Some say a 12% drop in marketing services revenue, and a 13% y-o-y drop in display ad revenue, which coincided with a $1.2B drop in net revenue overall, despite the fact that the Google rivals’ pageviews rose 8%.

Although 13% drops in display ad revenue isn’t drastic considering the economy, Yahoo could do much more to drum up business such as dropping its $25,000 US display advertising minimum per campaign. Google’s self service display advertising platforms allow small advertisers to generate significant volume in overall ad revenue – with little or no manpower necessary. Hey, didn’t Barack Obama out-fundraise every other candidate by accepting donations as low as $5?

Yahoo admits its deficiencies: “We still aren’t easy enough to do business with when it comes to buying. The platforms will help focus on marketing ad buying easier,” said CEO Carol Bartz to AdAge.

Yahoo also announced plans to cut 5% of its workforce — a loss of nearly 700 positions — in the near future. CEO Carol Bartz dubbed it a “natural outgrowth of the work we’re doing to streamline our structure, globalize products, slim our portfolio and eliminate duplications,” Advertising Age reports.

…Or just get better at servicing advertisers from boutique to conglomerate.

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