Yahoo Hopes Its Advertising Blitz Clicks
As its rivals create a bigger buzz on the Internet, Yahoo Inc. is hitting television and radio airwaves to remind people that its website remains on the cutting edge of technology and culture.
The advertising blitz, scheduled to begin Thursday, marks the Sunnyvale, Calif.-based company’s biggest marketing push in two years.
Besides buying TV and radio time, Yahoo also will be spreading its messages in movie theaters across the United States.
As an added promotion, Yahoo will offer coupons for a free cup of coffee at Dunkin’ Donuts stores to anyone who sets Yahoo.com as their home page Friday.
Yahoo executives bill the multimillion-dollar campaign as a celebration of several significant improvements to its website, including a makeover of the home page, an e-mail upgrade and a service that enables users to tap into their collective knowledge to find answers to tough questions.
“This is a great time for us to talk to our customers and encourage them to visit the new Yahoo.com,” said Allen Olivo, Yahoo’s vice president of global brand marketing. “It’s an invitation to come back to those who haven’t been using us in a while as well as to those who haven’t been using us as frequently as they once did.”
But the push also reflects the mounting pressure on Yahoo as it struggles to catch up to Google Inc. in the lucrative online search market. Yahoo is also battling perceptions that start-ups such as MySpace.com have become hipper places to hang out.
And old standbys such as Microsoft Corp. and Time Warner Inc.’s AOL are spending heavily to lure traffic away from Yahoo.
“Yahoo is probably feeling some erosion of its brand,” said Brad Scott, director of digital branding for San Francisco consulting firm Landor Associates. “They probably want to build some awareness again.”
Yahoo claims 412 million users. Last month it attracted nearly 107 million U.S. visitors, more than any other online destination, according to Nielsen/ NetRatings.
But Yahoo’s search engine lags behind Google’s, both for processing requests and distributing ads that will produce revenue-generating clicks -- problems that have depressed the company’s stock. Yahoo shares ended last week at $29.32, marking a 25% decline since the end of last year.
Through July, Yahoo held a 29% share of the U.S. search market, compared with 44% for Google, according to ComScore Media Metrix. At the same time in the previous year, Google’s lead on Yahoo was only 6 percentage points.
Mountain View, Calif.-based Google is far richer, with a market value of $127 billion and about $10 billion in cash. Yahoo has a market value of $39 billion and about $2.7 billion in cash.
To make things worse, Google has become synonymous with looking things up on the Internet without its having to spend on expensive TV and radio ads.
“Instead of worrying about branding, Google is able to spend time and money on building better algorithms to help people find information and data,” said Regis McKenna, who helped steer the marketing campaigns of Apple Computer Inc. and Intel Corp.
Google spends heavily to promote its search engine, but it generally avoids traditional advertising channels.
The company announced in May that it would bundle some of its software on Dell Inc.’s personal computers so Google wouldn’t have to rely on users downloading its software from the Internet. Financial terms were not disclosed, but analysts estimated that Google could pay as much as $1 billion for a three-year deal.
“Google is a very media-savvy company,” Scott said. “They realize a prime spot on a computer or a website can be just as critical as a 30-second spot on prime-time television.”
News Corp.’s MySpace.com has been threatening to dethrone Yahoo as the most viewed site.
In August, Web surfers pulled up 32.7 billion Yahoo pages, up from 31.5 billion pages a year ago, Nielsen/NetRatings said. But the viewership at MySpace nearly tripled to 27.3 billion pages.
