Oath to become Verizon Media Group as telecom doubles down on umbrella brand
Since the its inception a year and a half ago, Oath has failed to compete with the likes of Google and Facebook in the digital ad space.
Oath officially announced on Tuesday the company is changing its name to Verizon Media Group, a decision that will take effect beginning Jan. 8, 2019. Founded in June 2017 as a result of the Yahoo-AOL merger, Oath aimed to be an advertising powerhouse — competing with the likes of Facebook and Google — but has never been able to live up to former CEO Tim Armstrong’s vision.
Too little too late. Oath’s new name may give advertisers a more relevant reference of its media offerings — a list that includes the likes of Yahoo, AOL, HuffPost, Makers, TechCrunch and Tumblr — but it’s not likely to deliver any real business results. A September eMarketer report showed Oath owning only a 3.2 percent share of digital ad revenue in 2018, falling far behind Google and Facebook, which owned a combined 58 percent share. (Amazon and Microsoft also beat out Oath, but only by less than one percentage point each.)
Verizon Communications missed it’s $10 billion year-end goal by $8.2 billion, according to a recent NBC news report from November, and acknowledged to the Securities and Exchange Commission that it was taking a $4.6 billion hit on Oath’s value — dropping the brand’s worth to only $200 million.
Oath’s optimistic beginnings. In June 2017, Verizon merged Yahoo and AOL into one brand under the name Oath and named Tim Armstrong CEO. The company had high hopes of becoming a digital advertising leader, but ad industry executives were cautiously optimistic from the get-go.
When the deal was first rumored nearly a year before Verizon acquired Yahoo, AdRoll president and CEO Adam Berke told Marketing Land it made sense strategically to merge AOL and Yahoo, but the big question would be whether or not the new company could execute such ambitious plans.
“Yahoo and AOL both have sprawling portfolios of products, many of which compete in the same categories. Unifying all of these offerings into a clear and compelling story for marketers with cleanly organized sales, marketing, and account management teams is going to be a difficult task. One of the more underrated things that Facebook and Google both do really well is execute like a small company despite being very large. That’s the biggest risk area for Verizon-Yahoo-AOL that doesn’t have the same track record,” said Berke at the time.
This week’s rebrand comes three months after Verizon combined Oath’s ad tech stack under the name “Oath Ad Platforms” — a decision that echoed similar moves by Google and Amazon.
Within days of the Oath Ad Platforms announcement, Verizon confirmed CEO Tim Armstrong was exiting the company and would be replaced by Guru Gowrappan.
Why you should care. Telecommunication companies have long struggled to establish themselves as formidable digital ad leaders, capable of competing with platforms like Google or Facebook. Verizon isn’t alone in its attempt to enter the digital ad landscape. In June, AT&T acquired the ad exchange AppNexus, looking to build out a comprehensive content and programmatic ad business. The company is reportedly creating a marketplace focused on digital video and OTT.
Oath’s move to rebrand itself as Verizon Media Group more clearly identifies the company’s role as the umbrella brand for its portfolio of online publications. Already in the fourth quarter of 2018, the company has launched 20 new ad products — including digital OOH, connected TV and programmatic audio. Verizon also said it is continuing to work on its XR, AI, machine-learning and 5G technologies.