Yahoo!’s earnings are out! (PDF)
So, what happened to display? It’s a mixed bag – yet relatively positive considering the economy and current state of oversupply of display ad inventory on the Web.
From Seeking Alpha’s call transcript:
“Worldwide O&O display revenue declined 14% to $393 million. U.S. display declined 11% which was slightly better than first quarter’s decline. International declined 20% on a reported basis, but only 5% on a constant currency basis.
Non-guaranteed display revenue continued to grow strongly which partially offset the year-over-year decline on the guaranteed side. However, on a sequential basis guaranteed display revenue increased. Our sell through rate for guaranteed inventory improved in 2Q based on strong demand from large advertisers. This is an encouraging sign but we remain cautious about the economic environment generally.”
Yahoo! CEO Carol Bartz said that $75 million in Q3 would be invested in improving and building out the company’s display and search ad platforms with marketing spend to follow in Q4 and next year.
Merrill Lynch’s Imran Khan noted the improvement in guaranteed display and asked for more detail on it and non-reserved inventory quarter-over-quarter from Yahoo! CFO Tim Morse who said:
“We did see strength on the guaranteed side, the Class I side, quarter-over-quarter. So it is down year-over-year make no mistake about it. Quarter-over-quarter we did see it grow in the high single digits. There is a variety of different pricing and volumes in there that are tough to kind of pull out on their own. Overall though, I think we saw some really good strength in call it seven out of ten categories we track. The big industry categories like finance, travel and health and consumer products, etc.
So I saw some nice trends there. On the non-guaranteed side, the Class II side, a little bit of sequential growth but not a whole lot different from the first quarter.”
If the economy continues improving, year-over-year comparisons will start painting a much more positive story about Yahoo! assuming they execute.
Has M&A resumed?
Yahoo! dropped $20 million on social email startup, Xoopit, according to Kara Swisher at AllThingsD. Venture capital firms Accel Partners (Tumri, Collective Media, Dapper) and Foundation Capital (Waterfront Media, Spot Runner) among other investors must be relieved as they managed to make a few percentage points on the $6.5 million invested in the company since 2006. It’s also heartening to see Yahoo! take out the wallet as advertising tech startups could use another big player in the M&A space – let alone a player who many may have considered on its heels.
AdKnowledge jumped on the M&A bandwagon, too, as it acquired virtual currency company, SuperRewards, for a rumored $30 million according to Eric Eldon of VentureBeat who has a nice writeup tracking developments at both companies.
Wait! More Yahoo!! Reuters reports Yahoo! announced (also mentioned on the earnings call) a deal with AT&T enabling the phone company’s “5,000” person salesforce to sell display ads. ClickZ covers the controversy with the newspaper industry that evidently feels threatened by the deal and adds that Yahoo! is allowing AT&T to resell its APT platform local ad product. Given ongoing issues with my iPhone reception, I can’t imagine AT&T selling display.
Traffiq – the ad exchange, wait, the marketplace – announced an exciting partnership with Havas Digital. DM News’ writes:
“Under the terms of the partnership, Traffiq will be the main platform of choice for Havas Digital planners in Boston, New York and Chicago.
Havas Digital will use the Traffiq platform for online ad planning, buying, reporting, negotiation, campaign optimization and consolidated billing. In addition, media buyers and planners can use the interface to post RFPs, create vertical networks and connect with publisher storefronts.”
It will be interesting to see how this fits with the Adnetik strategy previously discussed here by Nathan Woodman of Havas Digital.
Aggregate Knowledge – funded by Kleiner Perkins Caufield & Byers, DAG Ventures, and First Round Capital – is stepping out from behind the curtain as a news release announced that CEO and co-founder, Paul Martino, will be participating in the Behavioral Ad Nets Conference in San Francisco next week (Need an Events calendar? Take a look at AdExchanger.com’s.) Also, DM News notes Aggregate Knowledge’s partnership with email vendor, Responsys, as A.K. reaches beyond display.
Newspaper tribulations are worldwide these days notes MediaWeek UK’s editor Steve Barrett. He suggests that ad optimization (or, do you “optimisation”?) companies like The Rubicon Project “could help newspapers especially by facilitating ad revenue from their vast overseas traffic.”
Matt Hulett (AdExchanger.com Q&A here), who stepped aside at mPire as we noted last week, has shown up over at RealNetworks’ games group according to Brier Dudley of the Seattle Times.
Former VP of Sales at Right Media, Mike Gaffney, has joined Autitude, a video ad management platform company, as Chief Revenue Officer according to a release.
More info on the DoubleClick Ad Exchange is available in the AdWords help section:
“Here’s how Google AdWords works with DoubleClick Ad Exchange to promote a consistent auction process:
- Publishers offer inventory to DoubleClick Ad Exchange
- DoubleClick Ad Exchange requests the first- and second-highest qualified
AdWords bids (on an eCPM basis, and modified by Quality Score), which are reduced by the Google AdWords revenue share. (This reduction means AdWords bids can be compared fairly with bids from other ad networks that take into account their respective revenue shares.)”
Given the lack of transparency through AdWords as well as potential dings for Quality Score and rev share, going directly through the ad exchange appears to be the most efficient. Google wants to pick up long tail advertisers where it can, no doubt – hence the plug-in with AdWords.
Brian Massey has a nice article over on ClickZ regarding the importance of creative in any behaviorally targeted campaign. Read “Creative Is the ‘Last Mile’ in Behavioral Targeting.” You can also visit his blog for more insights: “The Conversion Scientist.”
The Los Angeles Business Journal notes that OpenX’s $10.4 million in funding in the second quarter of 2009 was the largest for that time period in spite of overall funding for venture-backed companies in the Los Angeles area hitting a 12-year low.
Gavin O’Malley summarizes the latest Comscore Media Metrix numbers on MediaPost saying, “among the top gaining categories were Travel Transactions, Online Travel Agents, and Travel Information.” Read the Comscore release here.
The winds of convergence are getting stronger as a new Parks Associates reports claims that IPTV is now available in 40 million subscriber households worldwide writes Wayne Friedman of MediaPost. Cross-channel attribution just got a little bit easier.
