Powers discussed the Yahoo!'s second quarter results, sales strategy ahead as well as perspective on current industry trends with AdExchanger.com.
Click below or scroll down for more:
- Custom Vs Scale
- Sales Strategy Changes
- The Agency‑Marketer‑Yahoo! Triangle
- What Happened In Q2
- Industry Trends
AdExchanger.com: Looking at the premium inventory component today from Yahoo!’s perspective, what's the most important part for advertisers - Is it about creating custom opportunities? Or is it about scale and reach?
WP: Literally, it's the combination. It's creating these custom opportunities with the ability to target enough consumers and move more of the broadcast dollars online.
We think video is going to be a big part of that combination as well as creating ideas that live in an environment in which advertisers are confident. If you think about trusted places, certainly Yahoo is a place that people come for trusted content, trusted insights.
Transforming how we can bring scale and the engagement level of our audiences back to our advertisers is really the big opportunity for us. That's where we're putting our emphasis today.
First, what was really apparent to us, was that the overall marketplace had started to change dramatically. Our teams had been out talking about reach and scale -and all the metrics that literally, over the course of the last many years, were really important to advertisers. But, as we started to see the migration and shift of dollars coming into the online space, advertisers were getting more sophisticated. They wanted to get more than just the pure reach and find ways to engage consumers in a personal way.
So we started to recognize that opportunity and literally started to push and focus on what we call "solution selling" which means going in and literally understanding what the advertisers are trying to achieve, and then building a solution based on their need. Versus just going in and trying to sell against reach and scale.
That's the transition that we've had to make. And it's not that sellers were doing anything wrong. All we did is recognize the shift that has taken place in the marketplace.
It seems to me that you’re suggesting sellers spend more time spent with clients - potentially a smaller client list for individual sellers to manage. Have you needed to add to the sales team as well to cover the entire client list?
That's right. What we've done literally over the course of the last, many months, is ramp up. We're adding sales people to our field sales organization and our marketing solutions team that are creating these custom ideas. About two months ago, we launched a client partnership team which is focusing on the major agency holding companies to unlock even greater opportunities for us to work with them on a global basis. So that's a new initiative that we've just been in-market with for about the last six to eight weeks, and it's gaining a lot of great attention from the agencies.
Agencies are looking for media partners that have both global presence as well as scale. So Yahoo! matches up to what their needs are. And the conversations we've had with those holding companies have been really positive. We're staffing up to support it.
Even on the premium media side today, there are many tools in this space where the marketer can build out their own team to effect custom media buying strategies. What would you say about the evolution of the agency‑marketer‑Yahoo triangle right now?
The agencies are still really driving a lot of the conversations. You have some clients that are taking a little bit more of an active part in the discussion, but the agencies are still critically important on helping build the idea. At the end of the day, that's where most of the media is going to be activated - in the agencies. It’s really important that you have the conversations, for us to have both the client and the agency in the room to build the idea out. Because what the client really gives you is the essence or the DNA of the product or the services that they're really trying to get to.
And then obviously the agency brings expertise on the media side.
Is there any way you see working with marketers directly? Is there a scenario where that might make sense, or maybe a feeling that that happens?
There are marketers that will reach in on a direct basis, but it doesn't happen all that often. A lot of it is not necessarily to work around the agency. It's more about getting a better understanding. They want to know what's changing in the marketplace and what kind of new products that we're launching.
A lot of those inbound conversations are, "So tell us a little bit about this space,” and helping them educate their team on things that we're working on. That's where the direct contact happens.
As we started to migrate from the reach selling to solution selling we needed to make sure that we had the right people in the right jobs to do that. That kind of a transition for [salespeople] was just a different approach. Some of those people decided that wasn't something that they were interested in.
So we had a combination of people leaving based on attrition -both on their own and people that we transitioned out of the company. And at the same time with the gap, you need more resources to fill the broader gap of being able to have those client one-on-ones.
It was almost like a perfect storm. We had transition and attrition. We were filling the pipeline with new sellers as we were making this transition.
Also, we had the tsunami in Japan, which affected the automotive category - a big category for us. [Automotive] couldn't get parts, so the automotive companies really went somewhat dark in the last two months of the quarter.
CPG companies were feeling pressures from fuel price increases, commodity price increases. They didn't want to push the price increase to the consumers so they cut back on advertising. And then the financial markets - obviously there's been a lot of turbulence.
We had three of our top ten categories that were under a great deal of duress. With the transition, we just didn't have enough coverage to really be able to go deep into the other categories and make up for some of the challenges that we saw in our core categories.
Can solution selling overcome that sort of thing?
I think it absolutely can. One of the things that we started to see occurred around our anchor and tentpole event initiatives – “anchors” recur every year such as the Super Bowl, March Madness, the red carpet events, etc.
And then there are tentpole items, things that occur on occasion like the Royal Wedding, the Olympics and so on.
We've put much more of a concentration around how we go after those. It's just that something that the company really hadn't packaged and bundled before.
We did a program around red carpets for the spring with Chrysler. We had never previously thought about how we aggregate all those red carpet events together and package them.
All of a sudden we went from an advertiser who is spending X to an advertiser who saw the broader opportunity to really package these together to spend X plus Y. Those kind of conversations are really expanding.
Our pipeline within these anchors and tentpoles is pretty deep. We're getting a lot of traction around those conversations.
Is this about Yahoo better understanding itself as a media company?
I think so. We are really putting our stake in the ground as a premier digital media company. We really see ourselves as being a media company as powered by technology.
When I first got here (in November 2010), people always asked, "Are you a technology company or a media company?"
Well, we're a media company that's powered by technology. That's our differentiation.
I think what has surprised me is that we haven't seen more migration of brand dollars to the digital space especially when considering all of the time users spend online.
But, it obviously leads to the greatest opportunity. If close the gap on time spent versus consumption, it's a big opportunity for us. I think it gets back to how do we standardize the conversation. It's got to be around audiences.
If you can standardize the conversation and you can use an audience as a platform for comparison, then all of a sudden you have this creative canvas which is very much consistent with what the broadcasters do. You can insert video. You can insert connective, consumer experiences that broadcasters can't. We've got to get that story out to the marketplace to be able to help those dollars migrate faster.
Do you think a GRP is needed for online? Or is it about waiting until everything's IP-based and then this addressable world comes together more?
I think that second part is right. I don't think GRPs is the right barometer for comparatives. To me, it goes back to the concept around audiences and how do you define audiences by medium. How does the engagement of those audience within those mediums really differ?
So the connection back to the consumer is where I think we, being in the digital space, are going to win. The connection of driving awareness with consumers all the way through to driving an action. That's what very few other mediums can do.
Last question. You're a sales organization leader. What are a few areas of strategy which should be critical to individual, digital sellers today?
First, you've got to listen. I have seen it so many times - both in traditional media as well as digital media - where some sellers take the first 40 minutes and just throw all of the things that are in the seller’s bag at the client.
More times than not, if you listen to a client, they'll tell you how you can come back and build an idea to fit their needs.
It’s also about following up and through on what you commit to and building that relationship so that there is a level of trust.
To me, that builds for the next time when there's an RFP and maybe you get the first call. Maybe the client says, "You know what? Just come back. We had a great experience working with you guys over at Yahoo. Let's have you come in here early and help us start to shape the idea."
That's what you really want. You want to be able to make sure that you're getting the call.
By John Ebbert