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Is Time Money Why Yahoo’s $100M Gamble Might Pay Off
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Is Time Money Why Yahoo’s $100M Gamble Might Pay Off

Jon Gibs, VP Media Analytics, Online Division

Barbara Zack, Chief Strategy Officer, Nielsen IAG

Last week, Silicon Alley Insider published a piece titled “Yahoo’s New Ad Campaign Is Flopping,” judging the impact of Yahoo’s $100 million ad campaign to promote its new homepage. The piece’s main criticism was this: Yahoo’s unique audience did not increase as a result of the campaign. Our numbers agree with those in the piece — Yahoo’s unique audience did not increase.

However, our data also suggests that Silicon Alley Insider may have missed the broader point of the campaign.

Obviously, Yahoo wants to increase its audience – wouldn’t anyone? But this isn’t an easy task for a brand that’s already very large. Think about it – Yahoo! already reaches 68% of the web audience and faces stiff competition from the likes of Facebook, Google, MSN and AOL. When you’re this big, new audience is hard to come by.

Rather than focus on getting new customers, then, market leaders like Yahoo often try to sell more to their established base of loyal users. If this was Yahoo’s strategy there’s evidence to suggest that the campaign was a success.

For example, let’s look at time spent on Yahoo before the campaign (9/6 to 9/27) and for two 4 week periods after the campaign (10/4 to 10/25) and (11/1 to 11/22.)

yahoo-homepage-usage

When we looked at the 4 week average running up to the campaign’s launch Yahoo’s homepage had about 10.4 minutes of usage per person per week. The average of the 4 weeks after the campaign saw an increase in time per person of +3%. Four weeks after that saw an average increase of +7%.

On Yahoo’s already substantial base, these kinds of increases signal positive results, not a flop.

Can we attribute this growth to ad campaign? Maybe. Nielsen IAG studied the impact of both the TV and Online components of the campaign and found that while non-Yahoo users weren’t particularly moved by the advertising, Yahoo users were more responsive. In fact, Yahoo users exposed to the online campaign were 83% more likely to try the new Yahoo services than non-users, and Yahoo users exposed to the TV campaign were 240% more likely to try the new services than non-Yahoo users.

So, did the gamble pay off? It’s hard to say. The payoff really depends on two factors. First, was Yahoo able to maintain a CPM level high enough to fruitfully monetize the increased consumption? Second, will these levels of consumption continue? Only Yahoo knows the answer to the first question, and we won’t know the answer to the second for several months.

What we do know, however, is that the gauge for success of this campaign, shouldn’t solely be based on unique audience. When it comes to “success,” we should spend more time worrying about the time consumers spend with a site, and not just the incremental audience generated.

Note: Yahoo, Google, MSN and Facebook are clients of The Nielsen Company.