Yahoo (YHOO) today announced SmartAds a service to create customized contextual display ads on the fly. Google and Microsoft have been targeting text based ads to search query terms for years. What is new here is that Yahoo is generating customized display ads, commonly known as banner ads.
According to the New York Times, here is how the system will work:
The advertiser (or its agency) would provide Yahoo with the components of its display ads — including the logos, tag lines and images. The retailer would share information from its inventory databases that track the items on the shelves in each of its stores. Next, Yahoo would combine that data with the information it has about its users’ demographics and actions online to create a product-specific advertisement.
For airlines, SmartAds uses Yahoo’s information about its Web surfers to create display advertisements for each person that feature ticket offers with actual prices listed. In time, Yahoo plans to offer rich media advertisements where users can buy the ticket at that price right within the ad unit, rather than having to click through to another Web site.
In the past Yahoo would have display ads from hundreds of companies and they would try to match up an ad with the content on a page. For example, Yahoo would put a mortgage company ad on the Finance section and an airline ad on the Travel section. Most of Yahoo's traffic is non-targeted, meaning hits on the Yahoo home page, hits on Yahoo Mail, or some other general page. Because the ads were not well targeted advertisers paid very low CPM rates, as opposed to Google's higher CPC rates.
With SmartAds Yahoo will be able to dynamically assemble a display ad targeted to the user based on behavioral and demographic information Yahoo has collected. This is a major step forward for Yahoo, the leader in online display advertising, and should result in higher advertising rates.
The Panama project was supposed to do great things for Yahoo's ad targeting too. The results from Panama are unclear. SmartAds sounds like a better approach to display ads but only time will tell if it works and advertisers are willing to pay more to use it.
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Don, most people I know who sign up for Yahoo and many other free sites put in fake demo info (i.e., 90 yr old grandma for beverly hills). There is no incentive to do otherwise and a serious downside (re: identity theft). Moreover, most families share their computer usage so if Dad had been searching for fly fishing gear, when his daughter Suzy went to view the latest gossip on Paris Hilton, the ads displayed would have no relevance for her.
Posted by: brian | July 02, 2007 at 03:29 PM
Agreed on the demo info, but this is not what they are targeting from my understanding. It looks like it's contextual targeting- i.e. matching ads based on the content of the web page. This could be powerful if they start connecting the dots with video and contextual advertising. There are companies trying to match contextual ads with video, but they're using their own ad networks for the most part. I like the idea of pairing up SmartAds with contextual video advertising.
Posted by: Jeff M | July 02, 2007 at 10:28 PM
The Yahoo Smartads solution is a great solution to open up the market for real time mass personalization.
In order to get the massive take up of the benefits of this platform, Yahoo must create a set of tools for the Agency to create these templates for "any client or vertical market"
The Qmecom platform (www.qmecom.com) has been in development for a number of years which creates the tools for the "total ecosystem" - Linking creative, to media assets, to data rules to a scalable rendering facility.
The Yahoo Smartads solution is smart, the Qmecom solution is Smarter!
Posted by: Danny | July 03, 2007 at 02:52 AM