Why Yahoo acquired Flurry

Yahoo has purchased Flurry for hundreds of millions of dollars – in what has been described as a success story for both companies. Flurry was by all accounts looking for a profitable exit & Yahoo to bolster its mobile proposition, increase scale, and audience data.

While Flurry does have scale, its primary proposition is audience data. The Trojan horse product- Flurry Analytics – provides the advertising business with a unique insight into how hundreds of millions of users interact with apps, what they like, what they don’t like, and importantly who they are. This level of audience data is what differentiates a business selling data at $2 CPM on an exchange to an enriched dataset costing $20 CPM.

Yahoo whilst a giant behemoth, does lack scale compared to its rivals Google & Facebook and has been trying for a long time to reverse this trend on mobile. So while Flurry is going to help drive scale, the audience data itself is the real prize, and that’s why Yahoo has valued Flurry at hundreds of millions as opposed to just tens of millions.

Why is Audience Data so Valuable?

If you’re running an advertising campaign untargeted (without audience data), you’re looking to achieve a circa 1-2% click to download rate, and a large drop-off post-download. If due to audience data, you can eg understand who the finance users are, frequent travellers, new Mums, and big spenders- you can ensure that your campaign converts at a far greater rate, impacting engagement & also revenue- as you have reached relevant customers. To date, Facebook is leading the audience race, as it has deep insights into who people are and what they like doing. While Flurry’s proposition combined with Yahoo’s won’t be sufficient to catch Facebook up, it may help Yahoo justify high CPMs & increase bottom-line results for advertisers, as well as provide a useful step into the pure-play mobile world.