New York — Yahoo Inc.’s chief executive setting high expectations for the company’s forthcoming advertising platform, on Wednesday launched a much-anticipated upgrade to its online advertising platform that promises to introduce his company’s new system that will make Internet advertising cheaper and easier for publishers and advertisers.
Web giant boasts of a “transformative development for the advertising and publishing worlds.”
Yahoo Chief Executive Jerry Yang said in an interview that the new system promises to reduce the costs and complexity of online advertising would be as “revolutionary” as the digital video recorder, and that would allow them to sell their products and services on more than one website at a time, Yahoo’s Yang, predicted yesterday.
Yang stated that the system, dubbed APT, will launch initially with The San Francisco Chronicle and The San Jose Mercury News as partners, would be much less complicated than the current process of selling banner ads through hundreds of websites — a time consuming model with roots in traditional media like television and newspaper advertising.
“This system allows cross-selling between sales forces; it allows us to have visibility of what pricing is happening and where,” said Yang, who added the system could transform the online Web industry’s inefficiencies in selling ads.
The concept behind the system is to connect publishers, advertisers, agencies, networks, partners and developers on a unified platform, Yahoo said.
The Internet Company will provide APT participants with behavioral and geographical targeting data, among other things.
“One of the major benefits of APT from Yahoo is the fact that it is an open system, designed to enable advertisers to reach their audiences in their favorite places across the Web, and publishers to monetize inventory across the broadest possible demand channels,” Yahoo president Sue Decker said, in a statement.
Playing to Yahoo’s ability in display ads and technology targeting pitches to users’ interests, the new “Apt from Yahoo” platform will initially involve just the newspaper companies in a 2-year-old consortium led by Yahoo. Many of the papers joined that effort hoping for relief from the decline in their industry.
The platform, renamed from Amp because of a trademark conflict, is aimed at making it simpler for advertisers and publishers to buy and sell display ads, borrowing self-service techniques that have made text-based search ads lucrative for Internet companies, especially Google.
William Dean Singleton, vice chairman and chief executive with MediaNews Group Inc. and chairman of The Associated Press, said the typical newspaper now sells more than half of its inventory at deeply discounted rates because it can not offer such specific targeting.
Singleton said Apt should help eliminate or reduce the need for deep discounts.
“If we can sell the amount of online advertising we are selling today at rates that were much more normal, you would not be hearing people talk about the woes of the newspaper industry,” Singleton said at a launch event during the ad industry’s Advertising Week.
Currently, advertisers typically buy display advertising from individual sites, or use ad networks, where they do not always control where their ads appear. If Apt, developed as Yahoo promised, it would allow newspapers to make more money from online advertising. National advertisers do not want to make hundreds of tiny purchases, and the APT platform would make member newspapers’ Web site space available to national advertisers through one national purchase.
It would also allow publishers to use Yahoo’s targeting capabilities for ads on their sites, and use the demographic and behavioral information Yahoo has about users to show them appropriate ads. That “allows us to charge more” for the advertising space, said Singleton.
Publishers can also allow Yahoo and other newspapers to sell their ad space as long as it meets a minimum price. For example, if a publisher knows his sales force can get $1 per thousand impressions on a certain ad unit, he might allow partners to sell it if they can get $1.25 or higher.
Hillary Schneider, EVP, U.S. operations at Yahoo!, described Apt as a “seminal moment in the industry,” promising it will be a “transformative development for the advertising and publishing worlds” by allowing advertisers to shift focus from properties to audiences.
Yahoo! CEO Jerry Yang said that despite the advances of Web advertising, it has remained mired in outmoded ways of conducting business. Agencies and advertisers spend too much time faxing insertion orders and finding audiences. “The way we do business needs to change,” he said. This sentiment was echoed by Sue Decker, Yahoo!’s president, who said Internet advertising’s “crummy processes” are hindering its growth.
It is unclear whether the technology will give Yahoo the lift it needs. A previous technology revival focusing on search ads, called Panama, failed to resonate with Wall Street despite accolades from advertisers, and Yahoo has remained in a funk, its stock recently sinking to its lowest level in nearly five years.
The new platform comes at an inopportune time because advertisers are pulling back spending as the U.S. economy weakens, said David Hallerman, a senior analyst with eMarketer.
Hallerman said the technology could help newspapers’ Web sites, in particular, because of its large inventory of display ads and the comfort advertisers already have with newspapers’ brands.
Meanwhile, MySpace this week quietly launched a beta, self-service ad program. The offering, found at advertise.myspace.com, is intended to help businesses promote themselve’s across the social networking site.
Companies select their audience, determine how long the ad will run, and specify how much money they wish to spend. Users will not pay to list their advertisement; they will only be charged when someone clicks on the ad and visits a profile to learn more. Pricing runs from $25 up to $10,000.
“We will keep showing your ad on MySpace until your campaign has reached its expiration date, or you have reached your spending limit,” MySpace said.
Ads will be targeted to MySpace users with profile information or Internet Protocol addresses that correspond to the targeting options selected by the advertiser.