I’ve been watching a lot of Curtis’ work recently. HyperNormalisation, The Mayfair Set, The Trap, The Century of the Self, Bitter Lake and Pandora’s Box.
Just Adam Curtis channel on YouTube – has curated many of his documentaries.
I’ve been watching a lot of Curtis’ work recently. HyperNormalisation, The Mayfair Set, The Trap, The Century of the Self, Bitter Lake and Pandora’s Box.
Just Adam Curtis channel on YouTube – has curated many of his documentaries.
Much of the social marketing today for consumer brand is done through what is called influencer marketing. For a number of these influencers who have a large social following, working with brand has become very lucrative. But one of the hottest tickets at the moment within communications agencies are ‘micro-influencers’; Edelman Digital lists it as a key area in Digital Trends Report . There is widely cited research by Marketly that claims there is an engagement ceiling (at least on Instagram). Once a follower count gets beyond that, engagement rates decline. This micro-influencer sweet spot is apparently 1,000 – 100,000 followers.
What are micro-influencers?
Brown & Fiorella (2013) described micro influencers
Adequately identifying prospective customers, and further segmenting them based on situations and situational factors enables us to identify the people and businesses – or technologies an channels that are closest to them in each scenario. We call these micro-influencers and see them as the business’s opportunity to exert true influence over the customer’s decision-making process as opposed to macro-influencers who simply broadcast to a wider, more general audience.
Brown & Fiorella wanted to focus on formal prospect detail capture and conversion. It sounds like an adjunct to integrating marketing automation from the likes of Hubspot and Marketo into a public relations campaign.
This approach is more likely to work in certain circumstances:
Brown & Fiorella’s thinking tends to fall down, when you deploy their approach to:
Brand preference and purchase is much more dependent on reach and repetition to build familiarity and being ‘top-of-mind’ as a product.
Most money in influence marketing is spent in the consumer space as B2B marketing tends to struggle with:
(At least outside of the US).
Brown and Fiorella are 180 degrees away from the approach of consumer marketing maven Byron Sharp and his ‘smart’ mass marketing approach. This means that PR and social agencies are often out-of-step with the thinking of marketing clients, their media planners and other agency partners.
Engagement matters less than reach or repetition of brand message for mature sectors or brands. For many consumer brands the drop off in engagement amongst macro-influencers is a non-issue, a red herring.
The only part of the engagement measure that I would be concerned about in that case would be content propagation amongst my defined target audience – how widely had it been repeatedly shared as this would affect total reach.
If the client and planner are using Sharp’s thinking then this audience would be wide, but a certain amount of the propagation would be wasted – for instance outside targeted geographies.
From the perspective of communications agencies I can understand the obsession with engagement being part of their DNA. These businesses are in the offline world are engagement agencies; whether its politicians, regulators, fashion stylists, movie set designers, editors, journalists, TV producers or DJs.
Why are micro-influencers a hot topic now?
The most obvious reason is that more popular ‘macro-influencers’ are well informed about their commercial value which has been driven up to a point where they look expensive in terms of cost, even if you charitably look at it on a ‘per follower’ basis.
On the supply side of the equation influencer representation benefit from having more ‘inventory’ that can be sold at various price points to marketers.
Challenges in influencer marketing
From a marketing perspective there are a number of issues in influencer marketing – these factors are either unknown data points or represent an issue with the brand experience
Which makes it harder to factor into an econometric model that would help justify the investment in influencer marketing as a contribution to sales.
Let’s have a look at data around a campaign for a smartphone manufacturer that has been touted as successful by the agency involved. We don’t know the cost as its likely to be client confidential.
2 million YouTube views (we don’t know how many of these were driven by advertising)
13,587,159 impressions driven by 6 influencers
10,689 clicks from 90 posts
10 million impressions for the promotion of a colour variant of the smartphone model and 92,320 engaged
4.6% engagement rate (which we’re assured is 41% higher than the industry average for branded content)
What this doesn’t tell us:
Which could then be used to provide an estimate of its contributory factor to sales if you had an econometrics model. You can’t access how it works next to other tactics and there are limited outtakes for the learning marketing organisation.
Quality of brand placement
Many brands have struggled to get their brand in the influencers content in a way that:
Some luxury brands have managed to get around this by keeping control of the content; a good example of this is De Grisogono – a family-run high jewellery and luxury watch brand. They work with fashion bloggers that meet their high standards and invite them to events. (It’s obviously an oversight on their part that I haven’t had an invite yet.)
De Grisogono provides them with high-quality photography of its pieces and the event. They get the best of both worlds: influencer marketing but with a high standard of brand presentation which raises the quality of the achieved reach.
There is a school of thought that micro-influencers will be easier to manage in order to assure quality of brand placement. However, micro-influencers are likely to be aspiring macro-influencers and each will have a clear line of demarcation in their own head that they won’t cross. The reality is one of complexity dependent on:
Cost per reach
Influencers tend to talk about themselves in terms of the number of followers that they have. However many followers seldom engage with the influencers content. This happens for a number of reasons:
Followers as a data point is not the straight analogue of reach that the industry and influencers would have you believe based on how they present their data.
Reach numbers that are presented are often not that much more useful:
(Data via Golin, TapInfluence and Marriott)
Consistency of reach
So influencers may give us follower numbers or ‘total reach’ calculations but how do we know what reach their brand placement content is likely to achieve? At the moment, I don’t know how consistent influencers are, I have a ‘personal time’ data project currently in progress on it. More on that hopefully in a later post. There isn’t off-the-peg data that I know of, so I am pulling together a data set.
Until we understand the ‘quality of brand placement’ we wouldn’t be able to understand whether a piece of influencer content was a point of content delivery. We’d also need to know do audiences of influencer A also look at media channels or other influencers that we have in our overall media plan. There often isn’t an overall media plan and there often isn’t sufficient quality of audience data for influencers.
Edelman Digital Trends Report – (PDF) makes some interesting reading
Instagram Marketing: Does Influencer Size Matter? | Markerly Blog
Influence Marketing: How to Create, Manage and Measure Brand Influencers in Social Media Marketing by Danny Brown & Sam Fiorella ISBN-13: 978-0789751041 (2013)
Facebook Zero: Considering Life After the Demise of Organic Reach
2016 has been a watershed year in the western world. Political forces that were simmering, but previously untapped manifested themselves in populist victories. Political norms that were common currency for the past two decades have been brought into question and there will be societal impacts and changes in consumer tastes.
Businesses are being buffeted by these changes. In the case of the UK; supply chains will be re-engineered over the next two years to address the country’s departure from the European economic bloc. Most companies that I have spoken to are working on the assumption of the hardest Brexit:
This presents communications teams with opportunities and challenges:
There is also a wave of change for consumer businesses. Whole categories of products – carbonated drinks, cereals and spreads are losing market share to substitute products. This is hitting the large FMCG (fast-moving consumer goods) brands including:
Consumer brands have looked to counteract this in a number of ways:
Opportunities in terms of new products that communications agencies can offer
Focus on clients based on their strategic intent if they are implementing ZBB, here’s a quick guide I did earlier this year.
If your client programme lies in parts of the spectrum where you won’t benefit, then as an agency you have a few choices:
A second aspect of risk analysis is brand consolidation. There is not much that an agency can do with the change in brand architecture like Coca-Cola. The clients are likely to cut costs.
A clearer source of risk will be ‘local gems’ this is a consumer brand that is only sold in one country (it may be known under a different name in other countries). These brands are likely to be closed down or sold on, particularly if they are in declining growth sectors such as margarine spreads, cereals or carbonated drinks.
If you have only started planning about looking for replacement brands in your portfolio, it may already be too late. Best case scenario is that the brand is bought by a local FMCG company.
Looking at previous brand sales like Radion washing powder as an example the acquirers will not support it with significant marketing spend. Instead, they will look to maximise their investment by mining existing brand loyalty and awareness. Depending on the product category and the target audience will depend on how fast inevitable brand decline will be.
Either way it is not a particularly attractive piece of business or large or medium-sized agencies. An incumbent agency will have to repitch for the work as it will fall outside the purview of existing contracts and business relationships.
Advertising agencies have a head start in terms of their planners having a clear grip on what Sharp’s concept of smart mass marketing means for their discipline. PR agencies need to articulate this and reflect it in their account planning. They are still struggling to get to grips with social and are championing concepts like ‘micro-influencers’; that don’t fit into Sharp’s world view. They are effectively burning client respect.
PR agencies need to think much more in terms of programme audience reach and repetition for audiences, rather than the current focus on influence.
This is the advert served up by Web Summit in my feed today. Web Summit are famous for their use of data analysis to drive everything from advertising to seating arrangements, you can read more about the how on a blog post that I have linked to in more information at the bottom.
I presume that I have been targeted with the ad because of my connections given the relatively sparse amount of data in my profile and posts (most of them are published by a bot based on NASA content).
Given that I work in digital, the targeting seems pretty good so far – I am not British, but lets overlook that for a moment. Instead look at the creative headline and the image below. It immediately created a dissonant feeling for me. There was no 29 images. At least half the people featured are Americans despite the ‘Meet 29 British going to Web Summit in Lisbon this November‘.
Finally 29 British attendees out of a list of 30,000 sounds a really small proportion for an event held in Lisbon – with the content delivered in English. This copy reduces any ‘social proof’ that the ad may have it in trying to get me to attend.
Data is great at creative targeting, particularly through seeing network patterns which otherwise wouldn’t be apparent. Where it tends to fall down is in creative utilising the data.
Ok lets ignore for a moment the divisive nature of the current leadership battle. Or a membership that is fractured between a self-destructive underclass, a squeezed public sector and a despised metropolitan elite.
The thing that struck me about the hustings were not the words but the visual design. This wasn’t the socialist red that we saw from Kinnock onwards, but a dirty pink.
There was a union jack at the back that would have made more sense at a Conservative party conference. The politics of Labour are confused, but not half as confused as current visual presentation.
Generally I find politics a bit too grubby and dirty for this blog and have only touched it when I absolutely, positively didn’t have a choice.
On June 23, 2016 the UK goes to the polls to vote on whether the country should stay in or leave the European Union.
Over the next few days I will be writing two posts (this is the first one). The first of which is about how it has all been presented. The second post will be a guide for my non-UK based friends on what the hell it all means.
Political marketing generally isn’t the most amazing work, though there have been iconic campaigns. Given the momentous decision ahead of voters you would think that there would be a creative advertising campaign.
The US has led the way in iconic political campaigns. My favourites being the ‘Daisy’ ad used by Lyndon B. Johnson against Barry Goldwater.
Ronald Reagan’s ‘It’s morning in America again’ which is curiously soothing yet exceptionally emotive
Barack Obama’s simple messages of ‘Hope’, ‘Change You Can Believe In’ and ‘Yes We Can’ together with a focus on repetition and reach brought out the vote in his favour.
The UK has come up with good campaigns too; the Saatchi brothers ‘Britain Isn’t Working’ that helped get Margaret Thatcher the first time around. Ironically the poster doesn’t contain real unemployed people, but 20 Conservative party members shot over and over again to create the ‘conga line’.
It is such an iconic poster that the Labour party still has to jump over the hurdle of proving it wrong 30 years after its publication.
By comparison Vote In’s adverts lack… creativity and any sort of emotion to pull the audience in. It is like they are selling machine parts to procurement professionals, not a life-changing decision.
Vote Leave isn’t much better. Let’s start off with their domain strategy ‘voteleavetakecontrol.org’ – Google’s Adwords team must have been rubbing their hands with joy. For a campaign the ideal URL would have been voteleave.co.uk (which is a rick roll link) or brexit.com. According to redirect on brexit.com
www.Brexit.com & www.Brexit.co.uk were offered to the various national Out campaign groups for no charge.
After no contact was offered in response it is now up for sale.
School boy error. If you look at their content, they have managed to latch on to emotive themes, but the production values of the material look as it has been done by Dave in Doncaster who does wedding videos on the weekend.
And as we have less than a week to go to the polls the quality of the marketing isn’t likely to get any better.
In fact, the best piece of advertising for either side that I have seen was in Whitechapel. It is simple, snappy, emotive and likely done by an art student given the lack of declaration of campaign affiliation (i.e. a call to action to visit strongerin.co.uk or a claim that it was done on behalf of ‘Stronger In’ or ‘The In Campaign Limited’).
One last thought to ponder in this post
WPP in particular has a reputation for hiring marketing talent from political campaigns, and these people are sold on to clients as fresh thinkers and doers for their brands. Positive examples of this would be Obama campaign veterans Thomas Gensemer and Amy Gershkoff, or my old colleague Pat Ford who worked on Ronald Reagan’s campaign.
There will be marketers getting jobs with serious salaries on the back of this work and the designer of ‘Brits Don’t Quit’ will be working in an intern farm somewhere if they’re lucky. Life just isn’t fair.
Campaign on Labour Isn’t Working.
Ryanair’s EU referendum ad investigated by police | The Guardian – it might be illegal, but at least it has a pulse.
Thomas Gensemer LinkedIn profile
Amy Gershkoff LinkedIn profile
Patrick Ford LinkedIn profile
I managed to get hold of some data about the 10 most shared sites on Facebook and it made some interesting graphs. From a media perspective Facebook has become less social.
For the past year or so there has been a steady decline in the amount of content shared.
This is even more striking when I compared it with 12 months of data from January 2014 to January 2015.
This partly explains media’s push into other channels like SnapChat, especially given that Twitter has hit a natural ceiling in its subscriber base.
Secondly there has been a big push into video content, particularly live video content. Video is more expensive to produce, yet monetisation is difficult. Viewability of video ads is lower than display ads.
Ad fraud or ‘invalid traffic’ is higher on video advertising inventory solid via programmatic platforms – which are the hot new thing. Both of which are issues of concern to marketers and publishers alike.
Silicon Valley veteran financier Peter Thiel was behind the financing of a court case that Terry Bollea “Hulk Hogan” filed over a sex tape. An extract of the video was published by Gawker Media.
What Bollea did was stupid. As a veteran celebrity he must have realised that any kind of compromising position would be a tempting pay check for even his closest friends. The behaviour ran of the risk of endangering any commercial endorsements or media deals that he may have had in place. Usually commercial deals of this nature come with a good behaviour clause – I’ve had these clauses in every celebrity and influencer endorsement I’ve been involved with.
Bollea does have a family who would be caused considerable embarrassment by his actions. And it could be argued that secretly filmed sex between two consenting adults isn’t really newsworthy or pertinent for public consumption.
Gawker Media did what growing media empires have done in the past and conduct ‘yellow journalism’. Content of a puerile or sensational nature had been the stock in trade of William Randolph Heart, Joseph Pulitzer, Rupert Murdoch or William Aitken (Lord Beaverbrook). It isn’t morally defensible and it isn’t clever, it is an indictment of the audience.
Gawker did do the public a service, shining a torch on Silicon Valley in a way that hadn’t been done since the early days of InfoWorld’s Notes From The Field column and the book Accidental Empires: How the Boys of Silicon Valley Make Their Millions, Battle Foreign Competition, and Still Can’t Get a Date. The problem was that both of those were pre-smartphone and pre-Internet era portraits of the ‘Valley; back when it really did have foundries manufacturing microprocessors.
As an external observer and someone who has done PR for similar companies in the past. I would argue that the relationships between journalists and the Silicon Valley technology beat had become sufficiently docile that media didn’t provide the reader with insightful analysis of what was really going on.
It is the kind of relationship that the US military struggled to have in Iraq and Afghanistan through the embedding process. Instead of MREs and sharing the emotional highs and lows of action; San Francisco journalists got executive access and invites to the same social mixers and conferences.
Valleywag shook up media practices. Although editorial teams won’t admit it; the likes of Recode, TechCrunch and The Information took note.
Peter Thiel is the most interesting person in the cast of the Hulk Hogan court room drama. Thiel is known for his wealth and unique take on libertarianism. I won’t go into is Thiel right or wrong as none of the parties including Mr Thiel deserve our unreserved sympathies. It all just makes me want to re-apply hand sanitiser before using the internet.
What I find most interesting about Thiel’s actions is the way it signifies a cultural shift in Silicon Valley that I have talked about for a good while.
It is hard to believe that within living memory San Francisco was a port city with fish canneries that attracted drug addled misfits drawn by everything from its freewheeling culture and access to drugs. The Santa Clara valley to the south was fertile farm land that grew apricots and prunes. Fruit brand Del Monte started right here. The area grew up as Stanford University and the scientific developments of the late 19th to mid-20th century science revolutionised the US military.
Silicon Valley had a reputation for doing things differently. The mix of academia, counterculture and defence expenditure created a unique culture that evolved over time. The collegiate work environment founded by Bill Hewlett and Dave Packard had much to do with their background in education at Stanford. The HP Way, a set of values guided the company for over 60 years until Carly Fiorina’s tenure as CEO.
Bob Noyce came to Silicon Valley to do pioneering work at Shockley’s lab, however poor man management meant that he became a last minute member of the traitorous eight and went on to found Fairchild Semiconductor and Intel. In both of these businesses he founded a relaxed culture that was decades ahead of its time and similar to a modern day worker. If you work in a cube farm rather than offices – you can likely blame that on Noyce.
Whilst the enterprise software businesses like Oracle and chip companies like AMD mirrored the hard driving sales teams of their East Coast counterparts at IBM, many Bay Area companies were made of something different. Counterculture had seeped into the industry. The hacker culture of sharing software and the transformative nature of technology brought forth the Home Brew Computer Club and a missive from a nascent Microsoft CEO complaining about early software piracy. Steve Jobs had talked about how his LSD experiences had helped him do the things he did at Apple. Wired magazine was founded by former hippies like Stewart Brand and Kevin Kelly. There was a very good reason why The Grateful Dead were one of the first bands with a website.
I interviewed with a H-P employee back in the late 1990s who told me how had bought his ‘dancing bears’ tie and Jerry Garcia mouse mat from dead.net
The hippies in Silicon Valley brought their ‘back to the land’ ethos and doing their own thing. It is a form of libertarianism, but not one that Thiel or Uber’s Travis Kalanick would likely recognise as their own.
This was the libertarianism of the pioneer who ventured westward or the outlaw biker gang that yearned for the same freedom. The key difference is that the hippy technologist build their frontier to carry onwards, not having to worry about the Pacific ocean and instead going to new realms in code and network infrastructure.
The counterculture ethos could be seen even in web 2.0 products like Flickr which freely allowed customers to move their data or build their own apps on the APIs that the development team used.
Facebook is a marker in time for when the cultural tone of Silicon Valley changed. The hippies were out and the yuppies had taken over. Brogrammers and zero hour working for ‘Uber for’ applications that provide labour as a service.
The Gawker court case marks a similar milestone event in Silicon Valley culture. Thiel’s actions brought a number of his peers out in public to support him. Silicon Valley stops sounding like yuppies and more like the titan’s of the gilded age that would brook no disrespect and governed riches in the face of massive inequality. The Bay Area version of the American dream is dead for the secretaries and engineers who will no longer become financially independent on share options.
Customer service, once seen as a a way into start-ups is now a purgatory. I used to have a client in the late 1990s who worked their way up through a chip company from being in admin when the business was a new start-up to running marketing communications and PR across EMEA in the space of 10 years or so. That progression just wouldn’t happen now, the gilded class have their compliant (if at times resentful workforce) and now want a more respectful media.
The seeds of destruction are already sown for the gilded class. Innovation has moved East to the other side of the Pacific. Baidu is likely to be a leader in deep learning, driverless vehicles and innovation. The leading drone brand is DJI based in Shenzhen – rather than being designed in California and just assembled in China. Networks infrastructure leader Huawei are showing the kind of smarts marketing Android smartphones that Silicon Valley hardware makers would have had a decade ago.
Tencent has shown how dangerous it could be with the right marketing smarts. It already has as good software design chops as the Bay Area. Facebook Messenger bots have been on WeChat for years. If you haven’t done so give WeChat a try, just to see what the application looks like.
A compliant sycophantic media won’t help the gilded class build the financially successful future Silicon Valley in the same way that an inquiring body of journalists could do.
The changing culture of Silicon Valley
Barbarians in the Valley
From satori to Silicon Valley by Theodore Roszak
A Declaration of the Independence of Cyberspace
Tech Titans Raise Their Guard, Pushing Back Against News Media – New York Times
Those Entry-Level Startup Jobs? They’re Now Mostly Dead Ends in the Boondocks — Backchannel — Medium
Brandon Li put his short film Hong Kong Strong on Vimeo last week. The video sprang up all over my Facebook feed as proud Hong Kongers shared the video. There were a number of things happening. The Hong Kong Tourist Board was having its strategy and spend challenged by some of the public and Wan Chai was shut down as a senior Chinese official arrived in the city for a three-day inspection.
Brandon accompanied the video with a description of how it was made. The film was boiled down from over 1.7TB of rushes.
Google has had a transformative effect on the world. It reminds me of Dieter Rams on the concept of design had said something to the effect of good design being invisible – once you see the product you couldn’t imagine things exist any other way.
That’s a really good description of the web with Google. In the markets where it operates (with the exceptions of Czech Republic, South Korea, Japan and Russia) it’s a monopoly. Different regulatory authorities are investigating them for leveraging their monopoly into market domination in other categories.
With SERP (Search Engine Results Page) like this one above, I am not surprised that antitrust authorities are gaining an upper hand. This Urban Dictionary integration seems to cross the boundary from being useful to feature bundling. It deprives Urban Dictionary of an opportunity to put ad inventory in front of its audience.
It would be interesting to see if Google got into some sort of content agreement with Urban Dictionary or have just gone ahead and done this?
I have been pulling together slides for me that were useful for the work that I have been doing. I thought it would be worthwhile sharing these slides with a wider audience.
This month, I have selected a few slides that shed a light on advertising and consumer behaviour in China.
Looking at platforms it is hard to over play the importance of Tencent in the Chinese internet. Looking at mobile behaviour Tencent is responsible for at least four of the top ten properties: WeChat, QQ, QQ Browser and Tencent Video.
If we look at two Chinese internet companies Tencent and Netease we can see how the companies have massively increased the number of non-game apps that they provide to keep consumers in their eco-system for their digital lives.
(Microsoft’s high number is driven by a number experimental project apps and enterprise apps). What this means is that the mobile OS becomes less important, which is one of the reasons why western brands from Samsung to Apple have been hit in the market. Their platforms give them less leverage.
If we look at advertising spend in the Chinese market we can see that digital and radio advertising spend over-indexes. In some ways this is surprising. Online content is huge and historically the government controlled traditional media much more tightly than online media – to the detriment of watchable content on the television. More recently, government regulation has tightened across platforms.
Print advertising only slightly over-indexes in comparison to digital or radio. On the face of it there looks to be a massive opportunity in television advertising.
If we look at the media market consumption habits two things immediately stand out. Television and radio are largely holding their own in the face of rapidly growing digital consumption. The rapid growth in digital consumption is being driven by non-PC devices.
If you want to know why Huawei has partnered with Leica to boost the perception of its smartphone camera function, one of the factors involved is the massive growth of photography in Chinese mobile behaviour. This is especially interesting when one compares it to messaging and social – WeChat the largest mobile social platform is all encompassing in its functionality and place in modern Chinese life. A second factor is the way manufacturers are trying redefine the premium smartphone sector, at a time when innovation and experiential difference have become incremental.
You can see the full presentation here
I came across this question on Quora and decided to post my answer with additional data points and information here as well.
This is a big question. In the answers that it will receive you are likely to see:
Before we get into the why, lets think about the nature of businesses.
Public listed companies generally don’t last forever
The AEI said that 88 per cent of the companies that made up the Fortune 500 in 1954 are gone. Yahoo! is between 21 and 22 years old depending which way you count its age.
Yahoo! has outlasted many of its peers:
Only MSN remains of the original brands that it competed against. If MSN wasn’t a Microsoft business, its survival would be questionable. Microsoft’s online services lost money from 2006 through 2010. By comparison, Yahoo! has kept making a profit – despite its issues.
The technology sector has become a hunting ground for active investors. Back in the 1980s, American publicly listed brands were attacked by investors:
In the 1990s, factors changed:
Moving forward 20 years, the technology sector became in a similar place
Historic technology businesses have moved from being high growth to value businesses. This changed the nature of investors interest in them.
Google’s unique two-tier shareholding structure has proved to be an effective defence so far.
A business like Yahoo! looks like a classic corporate raid target as its value is less than the sum of its parts. It has a regular cashflow that could service a lot more debt at current interest rates. It has assets that can be quickly sold.
Capital has become much cheaper. This is partly a result of low interest rates set to keep the economy out of trouble in 2008. But there is also a lot of foreign capital and pension fund money looking for a home.
Given that we have the perfect vision of hindsight, Yahoo! missed key opportunities. Here are some of them.
Yahoo! failed to buy Google
Yes, Yahoo! did fail to buy Google. And their competitors failed to buy Google as well. Excite rejected the opportunity to buy Google for $750,000 in a deal arranged by Vinod Khosla. By comparison Terry Semel, then CEO of Yahoo! failed to buy Google for $5 billion. At the time Yahoo!’s entire market value was roughly $5 billion.
Yahoo! failed to buy DoubleClick
While Yahoo! was playing catch-up with Google on search. Google outbid the online industry to pay $3.1 billion for DoubleClick. DoubleClick provided advertisers with more opportunities to place banner ads than Yahoo! did.
Yahoo! failed to buy Facebook
Terry Semel offered $1 billion for Facebook in 2006. Semel wouldn’t go to $1.1 billion Facebook’s board wanted.
Yahoo! failed to sell to Microsoft
I don’t think that the Microsoft deal was a serious offer. There are reasons to be suspicious:
Yahoo! didn’t communicate these risk factors to shareholders. Which then left the door open for the Microsoft-funded Carl Icahn coup later on.
Yahoo!’s board has failed the company
I think that there is a stronger argument for this when you look at their selection of CEOs over the years
Problems in execution
Yahoo! had its fortune hitched to brand display advertising. Growth has dropped in this for the past ten years. Yahoo!’s declining advertisng revenues started in Q2 of 2006. Part of the problem was that Yahoo! had been too successful to begin with. Yahoo! sold its display advertising for way more than it was worth.
Yahoo! failed to monetise search as well as Google. And then handed its search business over to Microsoft, who failed to do as good as job as Yahoo! managed on its own.
Yahoo! failed to execute in mobile, despite some smart early efforts. Photo community Flickr was the default photo app on Nokia’s N73 blockbuster smartphone. The N73 launched at the end of April 2006. It was was one of the last things I worked on before leaving. Given that headstart Flickr could have been Instagram. Instead its a more specialist community of ‘proper’ photography enthusiasts. Yahoo! Messenger and Mail both worked on Nokia handsets from the mid-2000s. Yahoo! Go was an app which provided access to services including:
It could have provided the same function that Android provides for Google, but Yahoo! considered as ‘beta software’ right up to is finish in January 2010. Yahoo! has been providing Apple with weather information and stock data for the iPhone. Yet it hasn’t managed to build a successful iPhone app.
One way of illustrating the decline of Yahoo! in mobile is to look at the user numbers of Yahoo! mail, which seems to have peaked around September 2011.
Hotmail shows a linear increase over time, likely due to organisation changes as it has moved to the cloud and Gmail takes off, presumably on the back of Android – though iOS users also have Gmail accounts.
Yahoo!’s acquisition process was broken. Ever since Yahoo! wasted 1 billion dollars buying Mark Cuban’s Broadcast.com the business slowed down. Broadcast.com was a scare on the collective memory. Capital decisions took longer, acqusitions took longer. The cheque book was harder to open. Under Marissa Mayer, it was finally let loose, but the purchases seem to have made little difference.
Yahoo! failed to become a media company. Back when I was at Yahoo! we launched Kevin Sites in the Hot Zone – a sort of proto Vice News in 2005. Despite Semel’s Hollywood background, he and following CEOs never made it work. Despite the fact Yahoo! had joint ventures with TV networks in Australia and Canada. When Marissa Mayer finally managed to get talent in the door, audiences had moved to other sites:
Yahoo! failed to make social work. Yahoo! owned pioneer social brands:
Yahoo! products had a poor experience. I launched over 14 products at Yahoo! in just over a year. I only ever used 2 of them on a regular ongoing basis – Delicious and Flickr. Other products like Yahoo! 360, Yahoo! Answers or Yahoo! MyWeb 2 – fell into three categories:
Politics paid a part in this process. The Communications group (responsible for Messenger and Mail) had a lot of duplicate products. Yahoo! Photos was a bad version of Flickr. For storing your bookmarks there was:
This all bogs management down and sucks away resources. There were also so many projects that never saw the light, due to constant changes in priority.
Fortune 500 firms in 1955 vs. 2014; 88% are gone, and we’re all better off because of that dynamic ‘creative destruction’ | AEI Ideas
Microsoft’s Bing/MSN Results Truly Horrifying — Loss Rate Balloons To ~$3 Billion A Year | Business Insider
Stupid Business Decisions: Excite Rejects Google’s Asking Price | Minyanville
A Microsoft First: Activist ValueAct Gets a Board Seat – WSJ
How Yahoo! Blew It | Wired
Yahoo! Could Have Bought Facebook For 2% Of Today’s Valuation | Business Insider
Sorry Microsoft, Yahoo — Google Just Got Bigger | Ad Age