Yahoo buying Tumblr? It's just the start

The data turf war.

When a small impactful start-up is acquired by a sizeable market player, the inevitable questions of why and what for ensue. Yahoo did this on Monday when it announced the acquisition of Tumblr, for a staggering $1.1bn. The microblogging site, whilst a keen media player, has only posted revenues of $13m. So with motivations unlikely to be financial, this leaves us to look at Tumblr’s other key asset: Customers - which = DATA.

Data has quickly become the currency of the internet and the marriage of both social and interest data is a very powerful commodity. Being able to merge and stitch together data is something all organisations are increasingly looking for, as it brings genuine insight into audiences and their respective preferences. This level of understanding enables brands to market in a much more relevant and scaled fashion, something that can bring about an entire change in the marketing department's  relationship to both their internal and external customer. So, in Yahoo's case, its recent focus on becoming a lifestyle business must be data driven and it’s this insight that they stand to gain through Tumblr.

Whilst this is a clear turning point in the direction of Yahoo’s business strategy, the wider impact is much more interesting with the acknowledgement that data, and the insight it generates, can transform organisations. It’s not the first time that this data land-grab has occurred. Let us not forget when Facebook bought Instagram for a cool billion dollars, with only 13 employees, Google acquired Wildfire, and Salesforce are integrating Buddymedia; the motivation was the same - access to data to effectively target consumers based on their interests, eliminating the need for clusterbomb marketing.

Monetising and creating the system to mine data for insight, is the direction in which marketing and media is headed. Today, online media has become a commodity and the data held on it is now the currency to trade. This is a powerful position for social currency traders and platform enablers, as they can unlock the potential held within brands. So applying a revenue model that intelligently connects content and the consumer, with a brand they want to be engaged with, at their convenience, is an impactful entity and one that large media players are moving towards.

Where the internet of old had more of a database function, the passage of time has shown that it is maturing into a playground where data can be readily shared and responded too. Gone are the days when content was consumed in a silo. Now it’s shared, openly and discussed at length with any numbers of audiences, globally. These conversations, coupled with a more connected approach to life and advances in technology have created a consumer shift, so powerful that brands need to realign their business thinking. Data means knowledge and that, complemented with a dynamic brand proposition can be transformational.

It will be interesting to see how Yahoo works with Tumblr to reposition itself over the coming months. Clearly Tumblr’s power lies within the insight it can provide and if this data is used wisely, we could see Yahoo returning to 'darling' status once more. Don't be swayed by city commentators reflecting on the tech sector massacre in 2000, because the real success story here is not, as you might expect, the start-ups getting acquired or even the big players realising they need more than scale and brand loyalty to succeed; it’s arguably the wider tech industry. Where once software ruled; industry is now moving towards a more customer centric view of the world, using data to intelligently understand audiences and their needs in a super-fast, connected planet. This programmatic shift is one that is arguably more impactful and will drive business to the next level.

Rupert Staines is European Managing Director at RadiumOne

Marissa Mayer. Photograph: Getty Images

Rupert Staines is European Managing Director at RadiumOne

Photo: Getty
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What will the 2017 local elections tell us about the general election?

In her timing of the election, Theresa May is taking a leaf out of Margaret Thatcher's book. 

Local elections are, on the whole, a much better guide to the next general election than anything the polls might do.

In 2012, Kevin Cunningham, then working in Labour’s targeting and analysis team, surprised his colleagues by announcing that they had lost the 2015 election. Despite gaining 823 councillors and taking control of 32 more local authorities, Cunningham explained to colleagues, they hadn’t made anything like the gains necessary for that point in the parliament. Labour duly went on to lose, in defiance of the polls, in 2015.

Matt Singh, the founder of NumberCruncherPolitics, famously called the polling failure wrong, in part because Labour under Ed Miliband had underperformed their supposed poll share in local elections and parliamentary by-elections throughout the parliament.

The pattern in parliamentary by-elections and local elections under Jeremy Corbyn before the European referendum all pointed the same way – a result that was not catastrophically but slightly worse than that secured by Ed Miliband in 2015. Since the referendum, thanks to the popularity of Theresa May, the Conservative poll lead has soared but more importantly, their performance in contests around the country has improved, too.

As regular readers will know, I was under the impression that Labour’s position in the polls had deteriorated during the coup against Corbyn, but much to my surprise, Labour’s vote share remained essentially stagnant during that period. The picture instead has been one of steady deterioration, which has accelerated since the calling of the snap election. So far, voters buy Theresa May’s message that a large majority will help her get a good Brexit deal. (Spoiler alert: it won’t.)

If the polls are correct, assuming a 2020 election, what we would expect at the local elections would be for Labour to lose around 100 councillors, largely to the benefit of the Liberal Democrats, and the Conservatives to pick up around 100 seats too, largely to the detriment of Ukip.

But having the local elections just five weeks before the general elections changes things. Basically, what tends to happen in local elections is that the governing party takes a kicking in off-years, when voters treat the contests as a chance to stick two fingers up to the boost. But they do better when local elections are held on the same day as the general election, as voters tend to vote for their preferred governing party and then vote the same way in the elections on the same day.

The Conservatives’ 2015 performance is a handy example of this. David Cameron’s Tories gained 541 councillors that night. In 2014, they lost 236, in 2013 they lost 335, and in 2012 they lost 405. In 2011, an usually good year for the governing party, they actually gained 86, an early warning sign that Miliband was not on course to win, but one obscured because of the massive losses the Liberal Democrats sustained in 2011.

The pattern holds true for Labour governments, too. In 2010, Labour gained 417 councillors, having lost 291 and 331 in Gordon Brown’s first two council elections at the helm. In 2005, with an electoral map which, like this year’s was largely unfavourable to Labour, Tony Blair’s party only lost 114 councillors, in contrast to the losses of 464 councillors (2004), 831 councillors (2003) and 334 councillors (2002).  This holds true all the way back to 1979, the earliest meaningful comparison point thanks to changes to local authorities’ sizes and electorates, where Labour (the governing party) gained council seats after years of losing them.

So here’s the question: what happens when local elections are held in the same year but not the same day as local elections? Do people treat them as an opportunity to kick the government? Or do they vote “down-ticket” as they do when they’re held on the same day?

Before looking at the figures, I expected that they would be inclined to give them a miss. But actually, only the whole, these tend to be higher turnout affairs. In 1983 and 1987, although a general election had not been yet called, speculation that Margaret Thatcher would do so soon was high. In 1987, Labour prepared advertisements and a slogan for a May election. In both contests, voters behaved much more like a general election, not a local election.

The pattern – much to my surprise – holds for 1992, too, when the Conservatives went to the country in April 1992, a month before local elections. The Conservatives gained 303 seats in May 1992.

What does this mean for the coming elections? Well, basically, a good rule of thumb for predicting general elections is to look at local election results, and assume that the government will do a bit better and the opposition parties will do significantly worse.

(To give you an idea: two years into the last parliament, Labour’s projected national vote share after the local elections was 38 per cent. They got 31 per cent. In 1985, Labour’s projected national vote share based on the local elections was 39 per cent, they got 30 per cent. In 2007, the Conservatives projected share of the vote was 40 per cent – they got 36 per cent, a smaller fall, but probably because by 2010 Gordon Brown was more unpopular even than Tony Blair had been by 2007.)

In this instance, however, the evidence suggests that the Tories will do only slightly better and Labour and the Liberal Democrats only slightly worse in June than their local election performances in May. Adjust your sense of  what “a good night” for the various parties is accordingly. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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