If you want the biggest premium display advertising campaigns from the largest brands – they are the most profitable afterall – then you have to have a fair amount of leverage to do so. But rather than putting in all the leg work yourself, why not simply acquire the contacts and advertisers straight off the bat? Well, that’s pretty much what Yahoo has done.
In an effort to provide valuable assistance to the already popular Ad Marketplace, Yahoo has bought leading startup – 5to1. As a business that prides itself on transparency and offering advertisers a personalised service, ensuring that their promotions are given due prominence on premium sites.
As reported earlier in the month, Yahoo currently holds a 10.1% stake in the U.S. display advertising market. It attracts double the impressions of the nearest competitor (Microsoft), but trails well behind the market leader – Facebook, with a 31.2% share [see: AOL Q1 Profits Slide but Display Ads Bounce Back].
On the face of it, this is very positive. Yahoo is the leading conventional search engine/content host, and by some margin too. However this margin has been eroded, and not simply by Facebook. In the first quarter of 2010, Yahoo received 132 billion impressions on ads. By Q1 in 2011, this figure had shrunk to 113 billion. A loss of impressions means a reduction in revenue, which invariably means you have to invest elsewhere – both to increase the amount of unique content and the value of each click.
Yahoo hasn’t been shy in its efforts to create and promote new content. It received record figures courtesy of exclusive royal wedding streaming, with over 400 million page views in a single day [see: Yahoo! Sets Records With The Royal Wedding; Drives Largest Traffic Day for Single Event | Yahoo]. The former search engine also has deals in place to show sport highlights (including Premier League football, NBA and NHL) as well as developing news content through various channels.
By buying and incorporating 1to5, the company has made a clear statement of intent. Display advertising is hugely important to its business model and revenue, so why not invest in it further. Whether this has a direct impact on Marketplace remains to be seen, but it should certainly catch the eye of advertisers and generate a little buzz for Yahoo.