The 210 million-hit wonder

About 10 years ago, an unusual advertisement started appearing in all sorts of magazines depicting a cemetery littered with brand names.

The tombstones were mostly in the shape of well-known consumer products, and the caption begged writers and editors to preserve the copyright of the corporate owners’ intellectual property. Instead of blowing your nose with “a kleenex,” for example, you would blow your nose with “a Kleenex tissue.”

The ad revealed the kind of double-edged sword successful product companies face as they seek to entrench themselves in the public consciousness. The best examples are not merely household names; they are companies whose brands become verbs synonymous with their function. Do you photocopy a document, or do you Xerox it? Do you surf the Internet with a browser — or do you Yahoo?

Brand value is very important to Yahoo right now, having announced Thursday third quarter results that included a US$24 million loss and revenue declines of 44 per cent. A reorganization is in the works, and if it’s anything like the last one, heads will roll. Yahoo cut 420 jobs, or 12 per cent of its total workforce, earlier this year, and more layoffs seem likely.

The portal company’s CEO, Terry Semel, has indicated it has been hit hard by the decline in advertising spending (Note to Terry: join the club), and is struggling against increased competition from AOL-Time Warner and Microsoft’s MSN.com. But it defends itself on the grounds that competitor companies unfairly inflate the numbers of site visits they receive each month. In a conference call with financial analysts, Yahoo president Jeff Mallet said the company would try to create a standard of sorts by which reporting consistency will be guaranteed.

Good luck. Web site traffic has already introduced more controversy to the business of marketing than publishers, advertisers and affiliated service firms can deal with. Establishing rate cards for online media, determining frequency of publishing (and ad serving) are among issues only now being worked out as many portal companies close up shop.

Yahoo, which says advertising accounts for some 80 per cent of its revenue, is frustrated by the notion that the opening of a second browser could, by some companies, be counted as a visit. A standard would, in theory, level the playing field and swing advertisers back in Yahoo’s favour.

Although Yahoo has enough clout that it could get an interesting discussion going about this issue, there is no way of guaranteeing that anyone would adhere to it.

What this industry needs is the online equivalent of a circulation audit, performed by an independent industry association or regulatory body. Firms like Media Metrix and AC Neilsen already have the ability to do it, but their role in the selling of information may somehow taint their objectivity in the minds of the portal companies or advertisers.

Yahoo’s call to action would be more inspiring if it did not come at a time when angry investors are circling the beleaguered company like sharks, but it may serve to raise awareness among advertisers. It is they, not the portals, who hold the power to revolutionize this sector. Until they start demanding more accountability from the portals they do business with, no one is going to submit to third-party auditing. When the going was good, portals had little reason to invite close scrutiny of their traffic. As it becomes more critical to identify leading players, maybe they’ll be willing to prove there’s some method to their mathematics.

sschick@plesman.com

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