Marissa Speaks! CEO Mayer Lays Out Where Yahoo Needs To Go

Marissa Mayer

Yahoo CEO Marissa Mayer (Photo: Wikipedia)

From my Forbes.com blog The New Persuaders:

It’s a quarter that probably doesn’t matter much, but Yahoo eked out a small rise in profits on slightly higher sales in its third quarter.

It’s the first full quarter since CEO Marissa Mayer joined the company, and while investors are more concerned about the future, so far they like what they see in the last quarter. Shares are rising about 3% in after-hours trading following a decline of less than 1% today, to $15.77 a share.

Yahoo’s third-quarter revenues rose 2% to $1.09 billion, earning a 35-cent profit per share. Operating income came in at $150 million. Wall Street analysts were expecting net revenues of $1.08 billion, operating income of $180 million, and GAAP earnings per share of 26 cents. Including a onetime gain from the sale of shares of China’s Alibaba, Yahoo’s EPS was $2.64.

Those figures are minus the costs of acquiring traffic from website partners. Gross revenues fell 1% to $1.202 billion, a touch below analysts’ $1.206 billion estimate.

In particular, display ad revenue, Yahoo’s mainstay business, came in flat from a year ago at $452 million, but search ad revenues via its multi-year deal with Microsoft were better than expected, up 11% to $414 million.

And we’re underway on the analyst call with Mayer:

Mayer says she’s thrilled to be hear, naturally. She says she has been having a lot of fun. Why did I come to Yahoo? This job is tailor-made for me. Search, mobile, ads, home page, etc.–all things I built my career on.

She’ll talk about priorities and vision–great! First she addresses the people problem–that is, all the ones who have been leaving in droves for years. She says she has instituted new goals, metrics, etc. for people. True cultural change can’t be bought. The vast majority of what we’ve done hasn’t cost much, she says. …

Read the complete post at The New Persuaders.

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Facebook’s New Gift Service: Nice, But Not Yet An E-Commerce Game Changer

From my Forbes.com blog The New Persuaders:

Just in time for prime gift-giving holidays like Friday’s World Rabies Day (or if you prefer, Ask A Stupid Question Day), Facebook today launched a social gift service. It’s rolling out to only a select few for now.

I must be one of them, because I was able to send something to my wife to try it out. But in its current form, I doubt I’m going to use it much.

This isn’t the 2.0 version of the Facebook Gifts virtual-gift service that the company shut down two years ago, by the way. In fact, the new Gifts is built upon, and run by, the folks at Karma, the gift-giving service Facebook acquired in May.

It actually looks pretty good. And while I have ordered precisely one gift that obviously has not yet been delivered, so I can’t judge the entire gift-giving process, it worked quite smoothly. I clicked on my wife’s Timeline, clicked the gift button, and off I went to order her some caramels. She can even pick her own flavor–that’s pretty cool.

In this case, I obviously know her address, so one advantage of Facebook Gifts–not having to know or ask for someone’s address–is moot in my case. What’s more, I didn’t get an automatic reminder I might get if it were her birthday, so that bit of friction elimination wasn’t a factor for me either. But it’s fast and easy to send gifts to friends, and that’s great–not just for consumers, but for Facebook, which can use a service that brings in revenues not dependent upon its brand of advertising that many large marketers are still doubtful about.

So what isn’t great, at least for me?

* A lot of the most prominent gifts are pretty vanilla–teddy bears, spa appointments, flowers, cupcakes. Maybe they’re fine products. Maybe they’re the sort of thing most people give their friends. But for a service with a tagline “real friends, real gifts,” too many of these products seem just too impersonal. Products, especially gifts, are not necessarily fungible, and all the less so for close friends for whom you’re supposed to be getting something special. And if they’re not close friends–and let’s be honest, most people don’t have several hundred close friends–I probably won’t be sending them many gifts, from Facebook or anywhere else. …

Read the complete post at The New Persuaders.

Facebook To Start Charging Businesses To Run Offers

From my Forbes.com blog The New Persuaders:

After launching Offers several months ago, Facebook now is switching the retail and local merchant deals service into money-making mode.

The No. 1 social network, under pressure to prove that it can juice revenue growth to justify its $50 billion-plus valuation, said today that it will require merchants to buy at least $5 worth of ads in order for their offers to appear in  the newsfeeds of their target audiences and their friends. The amount businesses are required to pay for these ads, specifically Page Post ads, will vary depending on the size of their Facebook pages.

Facebook also has added several new features to Offers. For one, they’re available worldwide to all Pages with more than 400 fans. Also, merchants can add a bar code to an Offer so they can track results more easily, as well as potentially run Offers on their e-commerce sites.

Facebook says the changes, in particular the requirement that merchants spend money, should produce Offers that consumers view as higher-quality and more relevant because businesses will be incented to make those offers better if they’re paying for them. The changes also position Offers more squarely against incumbents Groupon and LivingSocial.

Facebook isn’t providing much in the way of numbers on how Offers are doing except for one example: It says the ARIA resort in Las Vegas booked more than 1,500 nights, producing a return of five times its investment from running Offers.

Although many of the new ad and commerce initiatives Facebook has been rolling out no doubt were planned well before its May initial public offering, the company has introduced a flurry of new ad formats lately. Facebook’s share price had fallen by half from the IPO, thanks to concerns by investors about whether its ads are catching on fast enough, especially on mobile devices.

Benchmark VC Matt Cohler: Mobile Ads Will Be Even Better Than Web Ads

Image representing Matt Cohler as depicted in ...

Image by Facebook via CrunchBase

From my Forbes.com blog The New Persuaders:

Despite rising doubts about whether mobile advertising will ever amount to much, Benchmark Capital partner Matt Cohler says he’s more jazzed than ever about the prospects.

In an interview with TechCrunch founder Mike Arrington at the TechCrunch Disrupt conference this morning in San Francisco, the former vice president of product management at Facebook said he has made zero investments this year, though he wasn’t entirely clear why except to say he made more than the usual number last year. But he said he’s looking actively for opportunities in “mobile marketplaces,” as well as products and services that use the smartphone as a “remote control for your life.” Here’s what else he had to say, in edited form:

Q: You haven’t made any investments lately. Why?

A: I haven’t made any investments this year. Last year I made more than a typical venture investor would.

It wasn’t a single specific decision. We’re at an interesting moment in time where aspects of various platforms are starting to shift. But I’ll do it if the time is right.

Q: Do you regret not making some investments?

A: I’m sure I passed on some things that will probably be successful.

Q: You criticized Groupon awhile ago when it was hot. That looks pretty smart two years later. But you have invested in a deals site in Brazil.

A: I think daily deals are a good idea. Any ad people view as content is a good ad, and that’s true for daily-deal ads too. But I’m not sure it’s smart to build a company around that one thing. Groupon has some interesting assets. The question is what can it do with them? …

Read the complete post at The New Persuaders.

How To Advertise Without Really Advertising On Mobile Devices

From my Forbes.com blog The New Persuaders:

As more and more of us access online content and services via smartphones and tablets, it’s becoming apparent that advertising that works on the Web viewed on desktop and laptop computers just won’t work as well–or at all–on mobile devices. Just look at Facebook’s stock price, sitting at half its IPO level partly because investors can’t figure out how or even if the company can make money from advertising on mobile devices.

Indeed, many people in marketing are wondering if advertising is even the best way to market on mobile devices, where screen real estate is tiny and people view traditional ads as an interruption. The advent of truly mobile computing, says MediaPost columnist Steve Smith, may allow us to rethink the fundamentals of marketing.

What might work better than banners on mobile devices? A panel at MediaPost’s Mobile Insider Summit today in Lake Tahoe, streamed online, took at crack at it, and panelists had some pretty interesting answers. On the panel were moderator Anna Bager, VP and general manager of the Interactive Advertising Bureau‘s Mobile Marketing Center of Excellence; Lars Albright, cofounder and CEO of mobile engagement company SessionMBrent Hieggelke, chief marketing officer at Urban Airship, a mobile message company for apps; Jon Vlassopulos, CEO of mobile entertainment studio/agency skyrockit; and Brian Wong, founder and CEO of mobile rewards network Kiip. Here’s what they had to say:

Bager says this is the “non-banner” panel. The banner is not dead, she says, but we need to see an evolution of banners and how we advertise on different screens.

Q: How is a mobile user different from a TV, radio or Internet user?

Hieggelke: Mobile devices are much more personal. They’re never beyond an arm’s length from people.

Wong: The person is no different. The usage is a lot more intimate. The smaller screen is seen (by marketers) as an impediment, which is frustrating.

Q: How can you use mobile devices differently from other channels?

Vlassopulos: We hope the differences will wash away. If mobile can be at the beginning of the idea channel, then the other ideas and creative will flow.

Albright: Too much marketing feels random on mobile.

Wong: One of the most exciting things we’re seeing is going beyond trying to spur actions. Tapping into streams of existing behavior has a lot more promise.

Vlassopulos: The notion of interruptive advertising in theory could go away and eventually will go away. If you start to think of advertising as content, and social media has helped here, then people might see it as something they like.

Wong: When you have an intimate relationship with someone, you don’t want to mess it up by constantly yelling at them. You can do that (intimate relationship) with mobile.

Albright: New formats such as rewards and opportunities to engage work better than banners. About 90% of people opt in and engage with these new formats, vs. 90% finding them annoying.

Wong: You need to let people maintain the activity they’re already engaged in. …

Read the complete post at The New Persuaders.

How Retailers Can Benefit From Consumer ‘Showrooming’

From my Forbes.com blog The New Persuaders:

Showrooming, the practice of checking out products in a physical store and then buying them online, is a rising concern among retailers as smartphones and other mobile devices become ubiquitous. Various apps make it easy to scan a barcode to compare prices and buy a product cheaper online.

I’ve somewhat skeptical of the impact this has on retailers, in part because of my own anecdotal experience. Even more than I showroom, I research a product online–often at Amazon and other online retailers presumed to be the key culprits in showrooming–and then buy a product in a physical store because I need it now or simply want to touch a range of products, not just look at photos of them. In other words, it works both ways.

In any case, some of the most savvy brand managers are making the case that physical retailers can actually benefit from consumer behaviors that lead to showrooming, leveraging them into a marketing and advertising opportunity, or at least employ ways to head it off–without draconian techniques that may do more harm than good. Today at MediaPost’s Mobile Insider Summit at Lake Tahoe, livestreamed online, a panel offered insights into how marketers can do just that.

On the panel were moderator Carla Paschke, director of mobile innovation for marketing agency EngaugeMike Bloxham, executive director of the research firm Media Behavior InstituteHans Fredericks, VP for mobile business development for researcher comScore; Sloane Kelley, director of interactive strategy for ad agency BFG Communications; and Alexis Rask, VP and general manager of brand partnerships for retail shopping app Shopkick. Here’s what they had to say:

Q: How do each of you view the opportunities with mobile?

Bloxham: Mobile is the first umbilical media we’ve ever had. It’s deeply personal. One thing that’s really important to understand … is mobile use in the full context of their lives, other media. Mobile and TV are inextricably linked, but so are other media. We can’t look at mobile in a vacuum. People use their mobile devices to inform their thinking before, during, and after purchasing.

The idea that retailers should suppress showrooming is delusional. That ship has already sailed.

Fredericks: Folks’ usage of smartphones vs. tablets vs. laptops is different. Folks are using that PC during the course of the day. The smartphone is fairly steady during waking hours, because it’s very personal. Tablets show very pronounced evening-hours use. By and large, it is more of a home use device.

Kelley: Brands that get hip to this early can really rise above the rest.

Rask: We see two main trends. One is what to do about the in-store experience. What doesn’t get talked about enough is that arc from the couch to the store. At Shopkick, about two-thirds of our usage is couch mode. People are planning their shopping trip. They’re basically deciding: Am I going to make a left out of the driveway or a right out of the driveway?

Bloxham: TV dominates by far in the home in terms of share of mind. A lot of people also use another screen. That’s actually the first screen, not the second as we often call it. Radio dominates in the car, and there’s an opportunity to drive people to a coupon on their mobile device, like what they’re going to eat for lunch.

Rask: Mobile is the only medium where you can map a full path to purchase. …

Read the complete post at The New Persuaders.

Why Investors Love Yelp Even As They Hate Other Social Stocks

Image representing Yelp as depicted in CrunchBase

Image via CrunchBase

From my Forbes.com blog The New Persuaders:

Unlike those other two little social media companies whose disappointing second-quarter reports last week knocked their shares to all-time lows, Yelp today wowed investors with better-than-expected second-quarter earnings and outlook for the rest of the year. After falling almost 6% today to $18.82, shares in the local business reviews site have rocketed up in after-hours trading by 14%.

Needless to say, a good quarter and outlook both help, but there’s more behind investors’ enthusiasm about Yelp versus Facebook and Zynga. They perceive some key positive fundamentals, too:

* Reviews of local businesses present a clear, understandable opportunity for advertising, and local advertising is a nut that no one online has yet cracked the way the Yellow Pages did in phone books. Yelp’s reviews provide a prime place for this advertising to appear. Local advertising rose 89% in the quarter. Meantime, fairly or not, both investors and advertisers still aren’t sure about Facebook’s and Zynga’s business models.

* Yelp has network effects in its favor, since the more reviews it gets (up 54% from a year ago, to 30 million), the more businesses are likely to create Yelp pages and advertise, in a self-reinforcing cycle. Active local business accounts rose 113% from a year ago, to 32,000. …

Read the complete post at The New Persuaders.

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