Why new CMO marks a change in strategy for Yahoo!

The news that Yahoo! has appointed its second Chief Marketing Officer in just three months is no great surprise – having been promoted to the role by interim CEO Ross Levinsohn in May, previous incumbent Mollie Spilman was only ever likely to get a ‘keep-the-seat-warm’ brief.

What is more interesting about the appointment of new marketing chief Kathy Savitt is her background, and what it says about the trouble web giant’s latest attempts to drag itself out of the financial doldrums after several years seeing its business shrink.

Savitt arrives at Yahoo! with some pedigree. Having cut her teeth in the technology industry as vice-president of strategic communications, content and initiatives, she moved into retail, working as CMO for US clothing company American Eagle Outfitters.

Then three-and-a-half years ago, Savitt launched social-commerce website Lockerz. Thanks to its innovative range of user reward schemes, which allowed visitors to earn points to spend on discount purchases and services by doing everything from watching videos to taking part in polls, the start-up has already built up a following of 45 million unique users.

It is this combination of expertise in consumer on-line marketing and strategic product development which is so revealing. Yahoo! has found itself in the mire in recent years as it has struggled in vain to keep up with the search engine and e-mail services offered by the likes of key rival Google, and the shifting social media landscape driven by Facebook and Twitter.

The sum result has been in exodus in users resulting in drops in revenue. Turnover has fallen for the past three consecutive years and shares this year are down by 7.9 per cent.

One of the key issues facing the company has been what many analysts have perceived as a tired and one-dimensional business and marketing strategy. Its focus on driving advertising revenue has apparently come at the expense of developing its consumer products, meaning it has spent more time cosying up to big brands than it has on developing content and updating the user experience.

It was also criticized for being slow on regionalizing its marketing, with its global ‘It’s You’ campaign in 2009 being widely labeled a flop.

Savitt is the first senior appointment made my new CEO Marissa Mayer, who herself arrived at the company having made her name in web product development as head of Google’s Local, Maps and Location products. With her background, bringing Savitt on board will confirm widespread expectations that Mayer’s strategy for turning the internet giant around is based on attracting back users and discovering new revenue streams through product innovation.

In order to clear the decks to allow that to happen, Savitt’s first task is likely to be an unenviable one – redefining the Yahoo! brand across all of its platforms.

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