Yahoo’s Ad-Sales Mess

Conversations with numerous digital media buyers reveal that the embattled CEO has either failed to ensure that Yahoo’s basic needs are met when it comes to ads sales or is in denial about how deep Yahoo’s problems are. For some agencies, Yahoo has essentially disappeared when it comes to staffing, attentiveness and the simple ability to handle significant dollar volume. This is all the more striking since Yahoo was once viewed as the gold standard of ad sales forces.

“They are not present,” said one buyer. “If I had to get something big done, I literally wouldn’t know who to call right now.”

Said another: “Yahoo has dropped off the map regarding senior attention as far as I can see. They still do a lot with the teams and maintain strong relationships with certain accounts, but I have asked multiple times to have a holding company-dedicated manager from their side to develop long-term strategic partnerships and I have gotten nothing from them.”

The buyer added: “Contrast that with Google, Microsoft and AOL who have been all over developing these kind of relationships. I honestly don’t even know who covers our agency from Yahoo right now, kind of sad for them.”

Bartz alluded to Yahoo’s sad sales situation on Tuesday’s during earnings call to annouce another disappointing quarter for the company. “We didn’t have enough sales people in front of the big clients,” she said.

That admission, and the feedback from big digital ad buyers calls into question Bartz’s leadership. The knock on her when she took the reins at Yahoo in January 2009 was that she lacked Web technology expertise or a background in media. Until now, much of the ire at Bartz has come from the product side, since Yahoo has hardly lit the world on fire with new technology. But it’s on sales that Yahoo has potentially squandered its biggest asset: deep inroads with Madison Avenue. Just a few years ago, Yahoo was the toast of the agency world while Google was viewed either warily or as a gussied-up version of ValPak that was purely for direct response.

But under Bartz Yahoo has continued to suffer from instability in the top echelon of its sales force. About six weeks ago, for instance, Yahoo let go of its Midwest regional vp of sales Jim Murphy. Agencies that used to deal with Murphy still don’t know when or if Murphy will be replaced or whom to even contact in the meantime. “That’s how broken it is, “ said another agency exec.

“At the top level, we are the ones who are more often reaching out to Yahoo,” said yet another media buyer. “And then every time we do there is another cast of characters two months later. They’re missing opportunities because of this.”

It’s not as though digital buyers don’t know Yahoo, or how massive its properties are. But with Yahoo long past its media darling days and with every social media upstart calling on buyers on a regular basis, share of mind is critical, particularly with Yahoo’s vast portfolio.

Thus, to not be able to service top advertisers is a massive failure by Bartz, who often seems fixated on Yahoo’s China presence, its search business (which has essentially been outsourced) and its fading position as a technology giant. Meanwhile, Yahoo’s massive clout in news, sports and entertainment seems pushed to the sidelines. Meanwhile, AOL is gaining ground under the leadership of CEO Tim Armstrong as it focuses squarely on brand advertising.

So what happened?  According to Wayne Powers, Yahoo’s svp of ad sales for North America, Yahoo has undertaken a major sales reorganization since he came on board last November. For example, eight regional sales teams have been pared down to just three. Plus, Powers has overseen the formation of a new team focused on building creative ad solutions and another one focused on global agency relations. Some agencies may have slipped through the cracks, he said. But Powers sees that as temporary, as his team is now aggressively hiring new sales execs.

“The last three or four months we’ve realigned our assets, and we’ve been reaching out to some very senior level people,” he said. “The conversations have dramatically changed. Now we’re looking at proving that through to buyers.”

Bartz herself actually made an appearance at a recent pitch to GroupM — emphasizing how crucial senior face time has become for Yahoo.

But besides feet on the street, buyers say that Yahoo has yet to adjust to a digital media landscape colored by social media juggernauts, blogging networks and exchange-based buying — all of which diminish its former prominence.

“They need to culturally adjust to not being in as dominant position as they have been,” said one leading digital buyers. “The buzz of Yahoo for many years made them an easy sell.”

So much so that Yahoo was inflexible when it came to pricing and even the kind of ads the portal would accept. “Now the buzz on them has gone sour, but you still have a bureaucracy that makes them less flexible and more expensive,” said a buyer.

Not everyone in the digital buying sector feels neglected or disrespected by Yahoo. Bryan Wiener, CEO of 360i, said that Yahoo’s service has actually been excellent. It’s the company’s lack of consistent focus and messaging that he cites as culprits for its display mess.

“I’m bullish on Yahoo, and [North American sales chief] Mark Ellis’ team is great,” said Wiener. “We have great results with Yahoo.”

The problem, according to Wiener, stems from the message coming from the top. “In this era of extreme complexity and fragmentation, Yahoo is still one of the best places to go for brand advertising,” he said. “So instead of having these philisophical discussions about whether Yahoo is a tech or media company, they need to just acknowledge that they are selling advertising.”

Weiner added that Yahoo could use a trade-marketing campaign touting its media strengths.  “It’s a huge wasted opportunity. I’m confused by it.”

Powers might even agree. He admitted that Yahoo had become too hung up on touting its huge reach, but not its media prowess. “We had been talking about scale, that we have 630 million, now 700 million uniques,” he said. “But we’ve started recognizing that you can get reach in a lot of places. We need to be focused on marketing solutions.”

“We’re NO. 1 in nine different categories,” Powers added. “That part of our story needs to be understood.”

Yet there are some in the digital buying world who don’t blame Yahoo’s display shortfalls on staffing or messaging. Rather, they say, Yahoo has simply lost its value in an ultra-competive market — something Bartz hasn’t come to grips with.

“We are in very, very regular contact with Yahoo,” said one agency executive.  “There are so many options for us, and sometimes Yahoo is a fit, sometimes not.”

“While we’re in regular contact with thier reps, the big deal-closing sales management has not been around to push us over the edge,” said another buyer. “Sounds like an excuse to me.”

One prominent digital buyer even heaped praise on Yahoo’s sales team’s record of service. The company’s problem, in her mind, is that Yahoo is simply no longer a must buy — and actually doesn’t fit many digital media plans.

“I think the bigger issue is that there is so much competition out there and that they don’t really have a niche,” said the exec. “They are not the biggest meaning you can’t buy around them, they do not overly specialize in one demographic, and they are not the hot new niche site. There are so many properties out there that a site has to fall in one of those to buckets to be a must buy.”