Wall Street certainly has confidence in Yahoo under Ms. Mayer;
the company's stock price is up more than 50% since she became CEO.
At the same time, many in the industry feel that the displeasure
among ad agencies will catch up to the company in the long run, if
not remedied soon. A key part of that remedy will surely be the
executive it hires to run its Americas business -- that search is
the focus of much industry interest. But some execs warn it can't
afford to wait.
"It's crucial. Absolutely crucial," said one senior agency
executive, who would only speak about what he described as a
deteriorating relationship with Yahoo on a condition of anonymity.
"I don't know what their strategy is, but if it includes agencies
then they are going to have to fix what they currently have."
This executive said that Ms. Mayer and COO Henrique De Castro
have made it clear that they have little interest in building
relationships with media agencies -- the outfits that decide where
big advertisers spend their advertising dollars. Mr. de Castro, for
example, has been known to ignore important emails from senior
Many in the industry were also disappointed with his speech at
the recent Interactive Advertising Bureau annual meeting; several
execs in attendance said he presented an elementary Yahoo sales
pitch more appropriate for consumers who knew nothing about how the
company makes money than agencies looking for real updates.
"I continue to be astonished at how lackadaisical they are in
dealing with us," the exec said. "And not just Henrique; Marissa
too. They don't think agencies are important."
Partners, not clients
There's a certain amount of ego at play here; media agencies --
especially ones in control of the biggest budgets -- are used to
publishers catering to them. They want to feel like partners,
instead of just clients that help to pay Yahoo's bills. It's a game
as old as the industry. And it doesn't help that many agency
executives had extremely close relationships with Ross Levinsohn,
the former Yahoo Americas chief and interim CEO.
Former Google engineer Ms. Mayer has re-fashioned Yahoo as a
"tech company," and part of that appears to mean doing away with
the chummy relationships agency execs expect from media companies.
Indeed, in their roles at Google, neither Ms. Mayer nor Mr. De
Castro worked closely with agencies, and thus far at Yahoo have
felt no need to start.
Still, Yahoo needs strong agency relationships. Display ad sales
at Yahoo excluding traffic acquisition costs dropped 5% year over
year in the fourth quarter of 2012, from $546 million to $520
Yahoo sales leaders below the C-level don't have much
information to share yet on future Yahoo consumer and ad products.
And they await a new leader in the yet-to-be-hired Americas chief
who will be the highest-profile advertiser liaison; one person
familiar with the situation told Ad Age Yahoo doesn't appear to be
close to making that hire. This person also said that Ms. Mayer is
expected to become more visible on the ad industry circuit in the
In the past, Yahoo was big on giving ad agencies a look at their
product roadmap and drumming up support for what they were
building, according to Adam Shlachter, senior VP-media at Digitas. But
in the last eight months, that hasn't happened much, he said.
"I don't know what the product strategy is, what the content
strategy is, what the data strategy is," he said. "And that's to
their detriment, because it puts people's attention up for
A new sales narrative
Rob Norman, chief digital officer at GroupM Global, the giant
WPP media group, said Yahoo's problem with agencies and advertisers
doesn't emanate from who is leading the company, but rather from
the lack of compelling sales narratives beyond the size of its
"Yahoo has become less central to the way people think about
online marketing," he said. "When that happens, you have to recover
relevance. The challenge for Yahoo management -- a business
challenge and a communication challenge -- is to make yourself
relevant again. I'm much less worried about the 'who' than the
Yahoo has to be able to sell advertisers on how they can help
solve their biggest business problems. Right now, that's not
happening, Mr. Norman said. He also said that the new messaging
from Yahoo about being the place for "daily habits" may be a good
internal rallying cry, but is too portal-sounding as an external