The truth about Yahoo! and their ad revenue

Yahoo! announced last month that ad revenue was in decline, specifically for financial services and automotive companies. As a result of this, their stock took a tumble of roughly 10%, and spread to Google, giving them a nearly 3% price drop. Yahoo The first thing I thought when I read this was, “Well… aren’t financial services and automotive companies in trouble anyway?” After all, with Ford laying off 2/3 of their workforce and every analyst in sight saying the heretofore impregnable housing bubble is currently in mid-burst, why wouldn’t financial services and automotive companies be pulling back on their advertising? Online advertising would be the first to go with many of these companies, as it is easier to shut down an online campaign today than it is to call up Clear Channel and say, “Uhm… say, we’re a bit pressed for cash these days. Can we not run those radio spots after all?”

The larger point, of course, is that budgets for internet ad placements have been growing for the last few years. Improvements in tracking, targeting and the creative technology behind the ads themselves have made advertising online a much more attractive venture. This is to say nothing of how comparatively inexpensive it is to build effective banners compared to filming an effective 30 second television spot. Essentially, this drop in Yahoo! revenue should be read more as a reflection of the trouble going on with housing and cars – not online advertising.

About the Author: Eric Reid

I am the Social Media Services Manager for Off Madison Ave. I've been with the company since 2006, when I was hired to do SEO, and link building in particular. When social networking sites started cropping up, at first I started using them to create backlinks - but they weren't the best for that, given all of the "nofollow" attributes. However, I did see the potential for all of the direct referral traffic they represent. Since then I've been actively pursuing both tactics for clients: Links that can help them for search, and social postings that get them involved in the conversation. It's about the coolest job you could ever get. ;)