Media Planning & Buying

What Verizon’s Acquisition of Yahoo Means For Marketers

July 26, 2016

Yesterday, Verizon officially announced that it will purchase Yahoo’s core internet assets for $4.8 billion. The sale marks an end to Yahoo’s twenty-two-year run as an independent company and will make Verizon one of the largest players in online advertising. This post will explore some of the ways the acquisition may impact marketers.

How a Larger Verizon Affects Marketers

Historically, Verizon was known as a broadband and mobile phone company, but it quickly emerged to be a major player in the online advertising world. In May 2015 Verizon purchased AOL for $4.4 billion, giving Verizon access to AOL’s programmatic ad technologies. These technologies, combined with the data collected from Verizon’s broadband and mobile network offerings, have allowed Verizon to effectively target ads across devices and its media brands like Techcrunch and the Huffington Post.

The Yahoo of today has many similarities with the AOL of 2015. Both had their heydays in the 1990s and early 2000s but lost relevancy as mobile devices became popular and competitors like Google and Facebook became dominant destinations. Under these challenging circumstances, both focused on content to drive traffic and serve ads, as both had media properties that were some of the most visited on the internet. According to comScore, AOL’s sites were the sixth most visited digital property in February with 166 million unique visitors across desktop and mobile. Yahoo was third with 204 million unique visitors.

In its official statement announcing the acquisition of Yahoo, Verizon noted that it was seeking additional properties to add to its portfolio. “The addition of Yahoo to Verizon and AOL will create one of the largest portfolios of owned and partnered global brands with extensive distribution capabilities. Combined, AOL and Yahoo will have more than 25 brands in its portfolio for continued investment and growth. Yahoo’s key assets include market-leading premium content brands in major categories including finance, news and sports, as well as one of the most popular email services globally with approximately 225 million monthly active users.”

For marketers, the expanded Verizon will give them the ability to make deals without having to go through multiple partners. Verizon will also be able to integrate sales team and offer packages that cover properties across AOL and Yahoo. Moreover, they will be able to scale their much larger content footprint using the Verizon mobile data and audience platforms. Mobile video will be a huge opportunity here as a function combining AOL, Yahoo, Verizon and the ad tech behind them. Bringing together Content and Audience will create a more compelling product offering, though largely still dwarfed by Google and Facebook’s persistently logged in user-base.

From a technological perspective, Verizon will be acquiring Yahoo’s Gemini ad platform, mobile analytics suite Flurry, and programmatic demand-side platform Brightroll. No announcements have been made about their futures and if changes will impact marketers. Additionally, Verizon has not made any announcements on if or how One By AOL, a self-service DSP, will work with Yahoo.

In terms of data, Verizon and Yahoo will have to combat the impression that many Yahoo Mail accounts are out-of-date or largely unused, to demonstrate to the advertising community that the data they have is clean, accurate and powerful. If the audience is truly there, then the dataset captured by Verizon/AOL has the potential to be very valuable – email use far surpasses that of mobile right now.

However, the potential use of this data also brings up concerns of privacy. Verizon’s knowledge of where you are, coupled with AOL and Yahoo’s knowledge of who you are, could become troubling to their cell subscribers. Verizon will have to employ caution in its use of this data to not scare off its base.

There is clear advertising potential here and Verizon has now positioned itself to better compete for dollars in a landscape dominated by the giants of digital advertising, Google and Facebook. And while the implications of the deal will not be felt immediately and will continue to emerge, Verizon should aim its sights on becoming a top five digital advertising player, in order to lure in consideration from major marketers. We will continue to monitor as the deal is implemented and new outcomes develop.