Why Yahoo Should Buy WPP

18 Comments

Alok Kejriwal is CEO and co-founder of the online gaming company games2win.com. He blogs at rodinhood.com.

In October of last year alone, Yahoo (NSDQ: YHOO) attracted 605 million unique Internet users (50% of the global Internet population), got them to return another 18 times, stick around for 9.5 minutes during their visit and generate over 100 billion page views. Which traditional media brand do you know that achieved this?

We all have experienced Yahoo

18 Comments

Sandeep

What an idea! this is absolutely insane :) I dont know how to react to it :)

Mitesh_AdoRoi

Dear Alok, your comment that, brand owners are demanding results to sell better..is great, and every body including me should agree, but Media company owning Ad Agency Group.. just does not work for either of them… Just wonder why would in August 2008, GOOGLE Sell the search marketing business of Performics, a division of DoubleClick to Paris based Publicis ??.The Answer to this is found in above threads, particularly that of Jeremiah. CONFLICT OF INTERESTThus such M&A is not the answer, but building capability as to what clients want is important, Remember Technique ‘Salesmanship in Print of Claude Hopkins’ is important, the Media may come & Go.. Check Agencies that actually deliver.. http://adage.com/agencya-list09 /JG – AdoRoi.com

El Nino

“Today, Martin Sorrell is the marketing oracle brand owners listen to”. Ha ha ha. Is this a joke or sarcasm ?
He runs a massively leveraged company which is going to be broken up in years to come. Yahoo can give the money back to its shareholders and ask them to make a decision. And I bet that they will not invest in Yahoo.
Let efficient markets rule.

Rodinhood

i appreciate all the comments and the retorts about conflict of interest, the impracticality of the execution, who is bigger than whom etc… all good points. The central theme however is to point to the fact that brand owners are demanding results to sell better and are falling out of ‘tricks’ that make them ‘look better’. Hence, like it or not, conflict or not, some day the toast will fall – and as always, on the buttered side!

CallCenteroutsourcing

I think this is a great point identified by the author. Especially the way yahoo has come up after slumping down has been worth appreciation. Attracting 605 million unique users is just too good. WPP can really help them convert these hits into good revenue. The combination will become very very attractive for the advertisers. Moreover, if the advertisers can clearly evaluate there advertisement output, the format becomes widely acceptable. I hope yahoo takes up the opportunity and move ahead in reconquering its space.

Rajan Arya

Sorry Alok but that is precisely not the way advertising/ media industry works in any part of the globe.

At the outset, WPP is clearly the larger of the 2 in terms of annual revenues and funds (internal accruals) which clearly rules out the acquisition threat from Yahoo which makes WPP the hunter and Yahoo the hunted. Yahoo had been in a similar position with Microsoft not a long time back.

Advertising/ Media buying/ planning have a certain credibility associated with them. When agencies advise/ deploy funds on behalf of a client, there are clear value addition parameters at work in suggesting the best possible media platform at the most cost effective price etc. There are lots of other important criteria too but we would skip it at the moment. There would be a clear conflict of client’s interests if agencies start owning media themselves resulting in clients funds being deployed for ulterior motives beyond communication and brand building. Credibility which is built painstakingly over decades of creativity and media planning, would go for a toss resulting in dilution of brand equity for both the agency as well as the brands they handle resulting in clear discomfort over working together.

Guest

Guess, this is what happens when you don’t have an editor or even correspondent and are desperate to update your site…

dustyj

This was intriguing but I have to say it seems somewhat ignorate of the role Advertising Agencies play, the realities of the current market and depth to which big clients are changing themselves to confront the new realities. Have you even seen Pepsi Refresh? That is an amazing experiencail idea and no WPP/Yahoo entitity would be willing to extend that idea socially. It would be narrowly deployed via Yahoo and, honestly it would lamer. Also, have you actually met a CMO/Brand Manager at say P&G or Hyundai? I would hardly call them “grey haired old ladies,” you are living the 90’s, bro. In the end this would only lead to client revolt and massive client shifts, at least in the US and Europe where ideas need to be more refined to work. I could see this as being a boon in the developing world for global mega-brands. Last, Yahoo is somewhat strong now but that could change overnight, I fail to see to the justification at all. It would funny to watch play out though.

Bertie1972

There has been a micro example of this in the form of the once UKs largest recruitment advertising agency TMP being owned by Monster. Monster management as good as forced TMP to buy on Monster alienating clients, people within the agency and establishing itself as a bad idea. As one writer above comments, I can just see the media planners deliberating long and hard on what strategy to put forward based on solid customer insights and then keep coming up with Yahoo. Utter drivel written by someone who does not understand the businesses, the people or the cultures.

Abdul Khan

A perferct example of vertical integration for the digital world, lets hope Yahoo have a read of this and go ahead with the merger, you’ve made some excellent points Alok.

HS

At over $15 B in annual revenues, isn’t WPP much bigger than Yahoo? So, who should be buying whom? WPP, surely would not have any interest in buying Yahoo… any more than buying Time Warner or Fox. The cultures and vision of the two companies are totally different. Surely looks like an uninformed writer’s wish/fantasy.

Jeremiah

I am sorry, this writer is a text book CEO with ZERO social undrestandiing nor appreciation of FACE to FACE business and marketing…so technical in your world view..”intermediary..” He deems WPP an intermediary and a CUSTODIAN. What media company today nor in history owns a marketing communications agency? None. Why?

1. Conflict of Interest
2. Lack of media options for client brands – conflict of interest again
3. Ineffeciency of CPM values – inflated rates
4. Turn off any potential media/content partners..

CEO of a gaming company posits this theory for Yahoo to buy WPP?..Do you have an MBA or a degree in critical thinking?Clearly not the latter. PaidContent..you should be embarrassed for posting this trash…

Ben

This is possibly the dumbest thing I have ever read from an Internet zealot – I work for a WPP company and have done for years and am just astonished at how moronic the thought and supporting rationale is.

you really think clients are going to be happy that the parent is a media company? i guess there goes the impartial, balanced media and comms strategy they pay for.

insane. embarrassing. if you even think this argument has merit please leave the advertising and marketing business forever.

davidogilvy2

This is a colossally moronic idea written by someone with no clue about brand marketing and online advertising

Ed Dunn

I enjoyed reading this.

While this sounds good written down, the execution would probably similiar to the Daimler/Chryser, Sprint/Nextel or Time/AOL mergers and go south.

The problem with these mergers is they sound cute but when you actually put them together, you have basically two mediorce entities trying to maintain their old identity and process.

Yahoo and WPP got shortcoming issues right now they can get over and I doubt these two entitites have what it takes to make something new happen. This is the core problem with these “matchup” ideals…

taxidodger

Lets see now. Yahoo buys WPP – and between the creative geniuses at Ogilvy and the engagement giant Yahoo, they develop the perfect campaign, go to their clients and say, we have a great idea, advertise on Yahoo! – and the client says – of course you would recommend Yahoo, you own it! I dont believe you.
Do you think that clients might see a certain objectivity problem, maybe a conflict of interest in this union of your?

jenkins

Horrible idea for Yahoo investors. WPP cannot grow organically — they have to keep diluting shareholders by making acquisitions. Bad idea.

Diana Bartomeu

I totally agree with this merge, if it happens. Coming from the offline world (working at The Bravo Group in Miami, a WPP company) and currently working online in Tradedoubler, I think this is something that should have been though of a long time ago. The merge of WPP and Yahoo would give clients a great added value to all their product and services. Being able to reach their ideal target market, and best of all track the results of their investment in advertising.

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