Yahoo Shows Signs of Display Ad Growth in Q3, Builds Publisher Network

  |  October 17, 2007   |  Comments

The firm reported year-over-year display ad growth in Q3 2007, and overall revenues of approximately $1.77 billion, up 12 percent over Q3 2006.

The mood among Yahoo execs during this afternoon's Q3 earnings call was one of cautious encouragement as the company reiterated long-term missions and announced new publisher relationships. It reported year-over-year display ad growth and higher CPM rates, along with overall revenues for the quarter ending September 30, 2007 of approximately $1.77 billion, up 12 percent over the same period last year.

The firm hopes new ad deals with Cars.com, Forbes.com, Ziff-Davis Media, and WebMD will propel it towards its goal of achieving broad ad network scale and complement efforts to grow traffic on its own properties through improvements in its search algorithm, focus on mobile, and an opening of its platform to developer applications.

Noting anticipated continued growth in the online ad market, Yahoo founder and CEO Jerry Yang said, "We are one of the only few companies that have the scale, technology, insights, and expertise to take advantage of this opportunity." Still, he admitted, in order for the company to reach its "multi-year objectives" to become the common Web "starting point," a "must buy" for advertisers, and enable open platforms, "What we must do better is integrate."

Yang and his colleagues alluded to extensive discussions over the past few months regarding the company's overall strategy, though he failed to specifically reference the "100 days" planning period he introduced during Yahoo's earnings call last quarter. Over 90 days have passed since he announced his plans to consider the firm's future intently over the subsequent 100 days.

He did, however, indicate part of the streamlining strategy will be to divest or cease funding a number of "one-off services" in the coming months.

The company reported marketing services revenues from its owned and operated sites came in at $922 million for Q3 of this year, up 24 percent over Q3 '06. Marketing services revenues from affiliate sites dipped 1 percent from the same period of 2006 to $622 million this past quarter, in part because the firm continues to remove low-quality affiliates from its network. Overall, marketing services revenues came in at $1.5 billion in Q3 of this year, up 13 percent over Q3 '06.

Minus traffic acquisition costs, Yahoo reported revenues totaling $1.28 billion in Q3 '07, an increase of 14 percent over Q3 '06.

According to Yahoo President Susan Decker, Yahoo's global display ads grew 20 percent year-over-year, better than expected. In addition, U.S.-owned and operated search revenues rose over 30 percent compared to the same quarter last year. A report from SearchIgnite and RBC Capital Markets released yesterday shows third quarter spending on Yahoo search ads rose 7.8 percent in Q3 2007 compared to Q2.

Decker also told investors the company's Panama ad management platform has been rolled out to "substantially all" Yahoo's customers globally.

Following its acquisition of ad network Blue Lithium and ad exchange Right Media, and ad serving deals with eBay, Comcast, and several online newspaper publishers, it has become clear Yahoo recognizes it must build scale for advertisers by looking beyond its own walls.

Four new publisher partnerships promise to extend Yahoo's ad reach. The company will allow Cars.com, Forbes.com, and Ziff-Davis Media to offer their advertisers display ad inventory on Yahoo's network. Forbes.com display inventory will also be added to Yahoo's finance inventory package. The company also signed an agreement to power search ads across WebMD's site network, and serve display ads within the network of health sites.

"We do expect the scale benefits to be very important to Yahoo," said Decker of the new publisher relationships. The company also has begun migrating its non-premium ad inventory into the Right Media exchange and expects to have the majority of it migrated by years end, she added.

Elaborating on the firm's mission to open its platform, following in the footsteps of Facebook, Yang explained Yahoo will open its Web pages to other applications, and create its own applications for integration elsewhere.

"We're inventing and driving to transform Yahoo...into a leading platform of choice for software developers," he said.

ClickZ Live Chicago Learn Digital Marketing Insights From Leading Brands!
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda, or register and attend one of the best ClickZ events yet!

ABOUT THE AUTHOR

Kate Kaye

Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

UPCOMING TRAINING

Featured White Papers

Google My Business Listings Demystified

Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.

5 Ways to Personalize Beyond the Subject Line

5 Ways to Personalize Beyond the Subject Line
82 percent of shoppers say they would buy more items from a brand if the emails they sent were more personalized. This white paper offer five tactics that will personalize your email beyond the subject line and drive real business growth.

WEBINARS

Jobs

    • Executive Assistant
      Executive Assistant (Agora Inc. ) - BaltimoreAgora Inc., an international publishing company, located in the Mt. Vernon district of Baltimore, MD...
    • Paid Search Specialist
      Paid Search Specialist (Boathouse, Inc.) - Waltham  Boathouse is looking for a Paid Search Specialist to work as a part of the Digital Acquisition...
    • Paid Search / Search Engine Marketing (SEM, PPC) Specialist
      Paid Search / Search Engine Marketing (SEM, PPC) Specialist (HeBS Digital) - New YorkJOB TITLE:     Paid Search / Search Engine Marketing...