Yahoo Will Earn 1.5% of Worldwide Digital Ad Dollars This Year - eMarketer

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Yahoo Will Earn 1.5% of Worldwide Digital Ad Dollars This Year

The company continues to simplify its business

July 15, 2016

In its earnings call next week, Yahoo is expected to give a progress update on its sale process, which will likely enter a third round of bidding the same day. Meanwhile, operating results will likely be lackluster.

Net Digital Ad Revenue Share Worldwide, by Company, 2015 & 2016 (% of total and billions)

“With Yahoo aggressively working to simplify its business, we expect to see continued growth in MAVENS,” said eMarketer senior forecasting analyst Martín Utreras. “However, we don’t expect much improvement in the company’s legacy business and cost structure—consumers continue migrating to mobile search, investment in traditional banner advertising continues to shrink, and Yahoo’s distribution partnerships continue adding more to traffic acquisition costs.”

Mobile, video, native and social—MAVENS—have been growing focus for Yahoo, which is one reason the company is shrinking in size relative to its competitors. This year, eMarketer estimates, Yahoo will earn just 1.5% of net digital ad revenues worldwide, down from 2.1% in 2015. The company is not only losing share of the market, but is also raking in fewer ad dollars in absolute terms, with revenues down 4.7% in 2015 and forecast to drop a further 13.9% this year.

eMarketer expects recover to begin in 2017 with a 2.0% increase in net ad revenues.

Yahoo’s share of the worldwide ad market is declining both on the search side and the display side, as Google and Facebook continue to dominate. On mobile, too, Yahoo is losing share of global revenues, with its share expected to drop from 1.5% in 2015 to 1.3% this year.

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