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Yahoo's $100 Million Ad Blitz

In the early part of the decade, Yahoo (YHOO) built a lovable brand around yodelers, exclamation points, and the color purple. The company is hoping those same symbols can help it gain relevance with today's Internet users.

Beginning on Sept. 28, Yahoo will run ads on TV, radio, billboards, and the Web as well as in print—the first piece of a new global marketing campaign running through 2010 that the company says will cost more than $100 million. The first few images of the campaign, which Yahoo unveiled Sept. 22 at the IAB MIXX Conference & Expo in New York, feature average young people, bright and playful colors, and taglines emphasizing users' control of their online experience. One reads: "Now the Internet has a personality. Yours."

The expensive ad blitz comes during a period of transition for the Sunnyvale (Calif.) company, which in January hired Carol Bartz as CEO and in July agreed to outsource its search technology to rival Microsoft (MSFT). While past ad campaigns focused on search, Yahoo now looks to create an image for itself as a central online destination for users who want to balance news and information with their social networks. "Yahoo is more than just a search company, and our ads will talk about more than just search," says Tapan Bhat, the company's senior vice-president of integrated consumer experiences.

Tweaking Its Pages The value of Yahoo's brand fell 7%, to $5.1 billion, over the past year, according to consultancy Interbrand's annual ranking of the Best Global Brands compiled in partnership with BusinessWeek. "They haven't kept pace with what's going on in terms of innovation or invention," says Andy Bateman, CEO of Interbrand New York. "Particularly for Internet-based brands, the question is, 'What have you done for me lately?'"

In recent months, Yahoo has rolled out changes to its high-traffic home page as well as its e-mail and instant messaging services. During the IAB event, it introduced tweaks to its search result pages. But marketing experts note that such revamps have gotten little attention, while many wait for innovations at rival Google (GOOG) with baited breath. "Any noise is good noise if it's going to get people to look at those products and services again," says Johnny Vulkan, a partner at boutique ad agency Anomaly.

Still, Vulkan says the ads themselves may miss the mark. The core idea—that the Web has become a place more controlled by each user's tastes and interests than by any media or technology company—is not an original one, though it's being sold as though it were, according to Vulkan. "I'm not being told anything new and I think it's kind of hard for Yahoo to take credit for it," he says. Plus, he adds, the message is mixed: It tells consumers the Internet is all about choice while at the same time telling them to visit Yahoo's site.

Was Bing a Better Investment? Other critics wonder whether Yahoo's money would be better spent on product improvements. "They're really trying to package up what's already there," says Andy Beal, editor of the Web site Marketing Pilgrim.

Beal doesn't think the ads are likely to win new customers. "I would argue that consumers have already made a decision: They are aware of what Yahoo has to offer, and they've decided there are better alternatives for their time," Beal says. The company might have been better off taking a cue from Microsoft, Beal says.

Before launching its own ad campaign for Bing, on which Microsoft is reportedly spending $80 million to $100 million, the company poured money into developing the search engine. "Bing is spending $100 million to launch a very compelling alternative to Google. [Yahoo is spending] $100 million to jog somebody's memory," he says.

Later in the campaign Yahoo plans to run ads featuring specific products, like its home page, says Bhat. He says the goal of the ads is to help Yahoo retain its market share in the U.S. while it tries to "grab land" in emerging markets where the campaign will appear, including Taiwan, Hong Kong, Korea, Indonesia, and Brazil.
MacMillan is a reporter for Bloomberg News and Bloomberg Businessweek in San Francisco.

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