Yahoo CMO Steele On Ad Campaign: Word Of Mouth Isn’t Enough For Us

Yahoo (NSDQ: YHOO) announced the second phase of its $100 million international ad campaign this week — a series of ads that push Yahoo’s services. The slogan: “Your favorite stuff all in one place. Make Yahoo your home page.” The ads follow a campaign opening that was widely panned for not putting enough emphasis on Yahoo’s products and for being ineffective at bringing more traffic to Yahoo properties.

In an interview with paidContent, chief marketing officer Elisa Steele responded to some common criticisms of Yahoo’s advertising strategy, and explained why Yahoo had chosen to specifically target Google (NSDQ: GOOG) in a marketing clip. Read on for edited excerpts from the conversation, which addresses the campaign in the U.S.

paidContent: How did the first phase of the campaign perform?

Elisa Steele: It was planned to get Yahoo back in the conversation. In the U.S., we were on a multi-year downward trend on brand-health metrics, particularly “Likely to recommend.” We’ve been monitoring those health metrics since the launch of the campaign and for the first time in a number of years those metrics have stabilized for Yahoo so we’re pleased with the performance of the campaign.

It was not designed for an increase in traffic. There are many outside publications that are evaluating it on that.

Looking back, is there anything you would have changed?

The video we played on broadcast. It was highly likeable. Consumers really liked the video. We didn’t do as well with, ‘So Yahoo, now what do you want me to do?’ What was the specific call to action in that spot? So they highly liked it but we didn’t give them enough call to action. So that’s one thing we’ll definitely do better this time.

How will you be measuring the effectiveness of the new phase?

We’re not abandoning brand-health metrics because it’s not good enough to stabilize. We need to actually move up and to the right. In addition to that, because this campaign is far more social, far more experiential, we’re going to be looking for feedback from consumers on how much more willing they are to try Yahoo products and in fact (whether) they actually do — (the) download of new apps that we put into the market, (the) time spent on the Yahoo network.

We’re not looking to increase new (unique users). People like to measure us on that and they probably will but that’s not what the campaign is designed for. It’s designed more to help current Yahoo users to find more experiences on Yahoo that they want to test and trial.

Why are you targeting Google and not, say, Facebook, in the marketing video you released?

To create an understanding of the difference of the two popular destinations. We’ve been compared a lot to Google over the past year and we think we’re really different than Google and Google has a great spot in consumer’s minds and so does Yahoo, and so we were trying to make sure that people understood that we know we’re really different and we think we’re really different and the comparison is a juxtaposition. It doesn’t really make a lot of sense.

How do you respond to the argument that has been made that offline campaigns aren’t that effective for online companies?

I think there is a place for brand building for any type of company including an internet company. Word of mouth is incredibly important for internet companies, of course. That’s a key lever for Yahoo just as it is for other competitors. It doesn’t end there. It doesn’t end in marketing either. We are making some investment in advertising, and, by the way, a lot less than Bing is making in advertising. We’re also making an investment in product development, in our sales force, in our insights team. This is part of a much larger plan for the company.

Why is it that Yahoo is investing so heavily in advertising while competitors like Google and Facebook are not?

I don’t think we’re investing “heavily.” I think we’re investing a certain amount more, and a lot less than another big internet destination, like Bing. About Google, I think you’re going to find that 2010 is a much different level of spend in advertising than there has been in the past. The market has really changed with an increased advertising investment from multiple players.

I think Facebook is probably right not to advertise right now. They’ve got strong word of mouth going. They’ve got a strong growth rate going in their user base and I don’t think I would invest in advertising if I were at Facebook either.