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Yahoo’s Bartz: Display Did Not Perform Well And We Didn’t Expect It

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Though Yahoo’s display advertising revenue in total was up 5 percent to $467 million in Q2, that was less than analysts anticipated. And as CEO Carol Bartz noted during the company’s earnings call, the company’s Americas display ad dollars were were flat and within the U.S., it was actually down. “Display did not perform well, and I’m not happy,” she said, kicking off the call with a dissection of the company’s ad performance. “This was unexpected.”

Sounding a bit more subdued than the f-bomb dropping feistiness of her earlier exchanges with analysts, Bartz was absolutely clear about identifying the root causes of Yahoo’s display troubles. She also offered a sense of how Yahoo (NSDQ: YHOO) plans to turn the situation around.

“Let’s start with what this was not,” Bartz said. This was not about new competitive developments. It was not about the economy — though it didn’t help, as we saw softness in autos and other major categories like retail and consumer products. It was not about engagement.”

No, the bottom line was that Yahoo didn’t have enough sales people to close the deals with premium marketers and that was due to the changes to Yahoo’s leadership and sales force structure. She noted that among the new hires were well-respected sales vets Ross Levinsohn, from Fox Interactive Media (NSDQ: NWS), as well as former AOL-er Mark Ellis and former Time Inc. (NYSE: TWX) exec Wayne Powers “We decided to reorganize the sales force for more rapid display growth in the future. There was significant turnover as all these changes affected. We underestimated on how much the changes would affect turnover.”

She said that the sales force staffing level is now back to where it was six months ago, but it that it would take time until those individuals got settled. Therefore, Bartz warned investors to expect a flat Q3.

In addition to continuing to build up the sales teams, Yahoo is also refocusing on its ad exchange. Yahoo was ahead of almost everyone when it bought Right Media about three years ago, but the landscape has changed drastically recently, as companies like Google (NSDQ: GOOG) have established dominance of display with its own Google Ad Exchange and display network — and now, it’s expected to have a complete pipeline for the buy and the sell sides with the addition of AdMeld, a supply-side platform that will complement Google’s demand-side offerings with Invite Media, which it bought last year.

“We had a lot of ads move through out exchange this past quarter and we’re aiming for more premium sales as we move forward with some new products,” she said, though without much specification.

One Response to “Yahoo’s Bartz: Display Did Not Perform Well And We Didn’t Expect It”

  1. FedUpTwo

    “Display did not perform well… This was unexpected.” Not to some people. The fact is, Yahoo thinks it’s more important to underhandedly push tons of prono into grade schools undetected than to sell major ads. They lose huge clients over that exact thing regularly. It turns out those corporations don’t really appreciate being tricked into directly sponsoring predators and pedos that prey on kids constantly. Parents and teachers probably don’t appreciate the ongoing deception either, but Yahoo doesn’t really care much about them. Yahoo is friends with so many pervos because they have so much in common. They both like to groom their victims before taking whatever they want, however possible. Not much difference between marketers and sexual predators, really. They might as well work together, but Yahoo needs to focus on getting those big advertising clients on board the prono train as well. Those companies need to get with the program and be a part of all the modern progress that’s online. It’s cool to have your corporate logo next to a creep exposing himself on Flickr, or on of some of Yahoo’s childpron there! All the big companies are doing these days, only most don’t know it. They just haven’t been shown the real truth about what Yahoo does, yet.