Duh. Compelling Content Drives Advertising Dollars
Recently, Yahoo announced that it’s sales in Q4 were going soft and reduced revenue and profit guidance for the year. The internet advertising category that Yahoo competes in had been growing by leaps and bounds. Thus, Yahoo’s announcement ended up punishing its stock and the sector in general.
A lot has been written about what’s going on at Yahoo. Company officials blamed its shortfall in earnings on a downturn in the automobile and housing sectors and – predictably – sidestepped the issue of whether execution problems getting their new search product out the door could be a contributing problem. Meanwhile, we’ve been waiting and waiting for someone to pick up on the obvious.
Sure, Detroit is in a slump and the housing market has slowed down in a way that is noticeable to all. Even so, what’s impacting Yahoo is that and the fact that the first screen – television – has come back from the dead.
This seasons’ new televisions shows are the strongest on record and advertisers have returned to the Big 4 (ABC, CBS, NBC, and Fox). Spending is up in the upfront market (which is where a lot of the money gets spent on the Big 4) and on cable. Since companies only have a certain amount of money to spend on marketing and advertising, what goes up over on in TV-land must go down elsewhere. this incremental spending is being felt over at Yahoo, where spending on Internet advertising – both display ads and search – has slowed down noticeably.
Somehow in all the excitement about the three screens – television, the PC, and mobile – the industry forgot the most basic lesson of all. Compelling content drives people. And advertisers put their dollars where the people are. And right now, a lot of people are watching TV because its worth watching again.