Wait until next year.
The advertising sales head of Internet powerhouse
indicated Wednesday that Yahoo! could steal significant amounts of ad spending out of national advertisers' television budgets. But she suggested the shift wouldn't be significant until 2005.
"You are going to see shades of real tipping points" this year, Yahoo! Chief Sales Officer Wenda Harris Millard said at an investment conference Wednesday. "I think really it's a setup for '05."
On Wednesday, Yahoo!'s stock continued its strong advance of the past year, rising $1 to $28.61.
Millard's comments, which she made in New York at Piper Jaffray's annual technology conference, spotlight the success that Yahoo! has had of late in Net advertising. The gains have come both in the branded advertising business on which Millard focused Wednesday, and the pay-per-click search marketing business that's the specialty of the
business Yahoo! acquired last year.
Thanks to online advertising sales, Yahoo! last month blew past Wall Street's earnings estimates for its first quarter. And last week, Yahoo! raised its guidance for operating cash flow margins, based in part on the company's ability to export its business internationally.
In a question-and-answer session at the conference, Millard characterized part of her staff's work as a long, slow effort to educate major advertisers about Internet advertising and to get them to change their spending habits.
Among the forces moving TV advertisers onto the Internet, said Millard, are the proliferation of broadband connections to the Internet and migration of males from age 18 to 34 -- in their media usage -- from television to the Internet.
TV advertisers, however, aren't shifting as quickly as are audiences, Millard suggested. "They live in a box," she said. "It's frightening to them; it's unnerving."
Helping Yahoo!, said Millard, was its focus, as well as the experience of its salesforce, which she said comprised "very sophisticated sellers." The advertising business, she noted, is still driven significantly by emotion and relationships; a staff that is experienced and trusted, she said, is a competitive advantage.
The most challenging customers, said Millard, are marketing powerhouses in the league of
Procter & Gamble
. These marketers, she said, want the Internet medium to prove itself, are good at what they do and won't change what they do immediately. "You have a big, slow boat that you need to turn," she said.
As Millard said at last week's analyst day, the toughest industry for Yahoo! to penetrate has been consumer packaged goods. That's at least in part because, to use her example, one can't sell a tube of toothpaste over the Internet.
Telcos, on the other hand, have shifted a significant percentage of their ad spending from newspapers to the Internet, and entertainment companies have shifted from newspapers as well.
In fact, movie studios have discovered the value of advertising on the Yahoo! home page on Thursdays and Fridays, Millard said. "It is critical for box office," she said.
Interviewed alongside Millard, David Karnstedt -- general manager of Overture's business that targets its biggest advertisers -- reiterated Overture's focus on its 10,000 to 20,000 largest advertisers.
Asked about reports that Overture's average per-click charges -- that is, the price that advertisers pay when users click on their listing -- were higher than that of pay-per-click rival
, Karnstedt didn't question the comparison. Instead, he talked about the price per click being only one element of pay-per-click advertising's value, along with factors such as the percentage of site visitors who are converted into customers. "It really comes down to the overall return," Karnstedt said.
Millard had her own outlook on the cost to advertise on Yahoo!. When one questioner mentioned Yahoo!'s raising prices, Millard replied, "We don't increase price. That's the market."