Yahoo pushes digital video advertising forward as display-ad revenue falls to $381M

Amid a continued decline in display-advertising revenue of 7 percent in the first quarter of 2015, to just $381 million, Yahoo is pushing investor focus toward its next-generation advertising initiatives: mobile, video, native and social, or what it dubs "MVNS." It also announced the rollout of two new video-advertising products: native video ads and video app install ads.

Yahoo native ads mobile

Demo of Yahoo's native video advertising, here located below the video content, on mobile devices. (Source: Yahoo blog)

MVNS, pronounced "mavens," is something that CEO Marissa Mayer calls "core to our growth," pointing out that these four categories combined grew 58 percent in Q1, to $363 million, the Wall Street Journal reported. Mayer noted in a Q1 earnings call on Tuesday that its MVNS segment saw more than $1 billion in revenue in 2014.

Adding new video-advertising formats is clearly part of MVNS and Yahoo's strategy to shift its core revenue away from older, less engaging display ads.

"With native video ads, we've combined two of our most engaging formats so that brand content can be as compelling as video [and] can be as beautifully integrated to the other experiences on our homepage, digital magazines and apps," said Prashant Fuloria, SVP of advertising products for Yahoo, in a blog post touting the new releases. She noted that users who viewed native ads on Yahoo's site increased their favorability toward brands 50 percent and raised their intent to purchase 28 percent.

Video app install ads--those advertisements enticing viewers to click and install a variety of apps, such as games, are another promising area, Fuloria said, noting that "Yahoo's app install video ads see an 89 percent completion rate, and users acquired have up to 43 percent more app sessions than average."

Game publisher Zynga has teamed up with Yahoo on app install ads and said it is pretty pleased with the success it's had using them.

It's also no surprise that Yahoo is launching these advertising options ahead of its Newfronts presentation in New York on April 27. Like other online players, the search-engine giant is banking heavily on the strength of its brand and its original content offerings, as well as creative advertising options, to draw in committed ad dollars.

Yahoo overall missed analyst forecasts for Q1, chalking up revenue of $1.04 billion and earnings per share of 15 cents. Analysts had expected $1.06 billion in revenue and 18 cents EPS. It saw profits of $21.2 million, down from $311.6 million a year earlier.

The company also said its video-stream total increased 16 percent in the first quarter, a trend it credited to the introduction of an autoplay feature. Yahoo noted that more than 600 million monthly active users accessed its site via mobile devices.

Integration of the recently acquired Brightroll ad platform is continuing, with Yahoo's demographic and behavioral measurement data added to the Brightroll marketplace, the company noted, along with its own ad inventory and that of analytics platform Flurry.

For more:
- read this blog post
- see this Seeking Alpha transcript
- WSJ has this story
- VentureBeat has this story

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