Yahoo just upped the ante in the display advertising space.
Ever get the feeling that somebody is watching over your shoulder while you browse the Web?
Yahoo’s new SmartAds program promises to bring to your monitor display ads based on your behavior, location and demographics.
New York — Yahoo Inc. on Monday announced new tools for online advertising that could push the company ahead in the race for what is called “behavioral targeting” – the ability to tailor online advertisements to the people most likely to buy.
Dubbed “SmartAds,” the new advertising platform, would help marketers create custom advertisements on the fly, using information on individual buyers and information on real prices and availability from vendors.
SmartAds, the company said, will display advertisement alongside search results that take into consideration the search terms used, the user’s location, his or her known interests other factors.
For example, a person who had recently searched for information about blenders might see an ad from the Target retail chain that gave the prices for the blenders on the shelves in the store closest to that person’s home.
The new platform is being touted by Yahoo as a way to give advertisers “the ability to deliver customized marketing messages to consumers, and still engage very large audiences with their brand.” To some people browsing the Web, it might feel like a ghost in the machine.
In testing conducted on Yahoo FareChase, SmartAds generally resulted in click-through rates of two to three times higher than static, non-customized ads using the same targeting and placement.
The personalized, on-the-fly targeting of advertising is the Holy Grail of Internet marketers. Search-based ads, such as those served up by Google’s AdSense program, present come-ons that are based on keywords people enter while searching the Web.
“It starts to marry the concept of targeting … with the construction of the ad,” Todd Teresi, Yahoo’s senior vice president of display marketplaces, told Reuters.
The aim, he said, is for “consumers to view advertising to be as relevant as the content they are looking at.”
The Internet has long promised this kind of one-to-one marketing, but it has often been difficult for advertisers to customize display advertisements with a broad reach.
“Ad agencies have been really struggling with how to scale the value proposition of the Internet,” said Teresi. “We now can get scalable one-to-one marketing.”
The announcement about SmartAds follows an extensive reshuffling in the executive offices at Yahoo, which included the departure of its chief executive, Terry Semel, and Wenda Harris Millard, the longtime chief sales officer.
Yahoo has struggled to catch up with Google in search advertising and has disappointed investors with its ad sales in the past few quarters.
SmartAds is one attempt to catch up. Although the technology is complex, the goal of SmartAds is simple: Show the right advertisement to the right person at just the moment he is about to pull out his wallet to make a purchase.
The system will present ads to people accessing Yahoo-branded products and services, an audience that exceeds 500 million, according to the search engine.
Targeting is one thing, but Yahoo said the SmartAds platform will also help eliminate the biggest roadblocks to display ads on the Web: the need to scale and change in real time.
Yahoo said the system will allow advertisers and agencies to “design a single set of individual creative components, provide Yahoo with that artwork and a feed to their entire database of offers,” and then sit back while the technology cranks out hundreds or thousands of “unique ad combinations based on those components.”
Yahoo has applied for a patent for SmartAds, the company said.
The technology also is to be applied free across advertisements bought on Right Media, the online ad exchange that Yahoo purchased this spring.
The new feature could give Right Media an advantage over other exchanges – like the one created by DoubleClick, the online company that Google agreed to purchase for $3.1 billion in April.
Two major airlines, which Teresi would not name, are testing SmartAds on Yahoo’s network of sites, including local newspapers as well as its own portal. Teresi said the system would be offered to other industries in the coming months, including automobile companies and retailers in the autumn.
Last week, Yahoo said it would merge its display and Web search advertising businesses to address client requests for campaigns that combine both types of ads.
SmartAds will operate on Yahoo’s network of Web sites as well as in its advertising partnerships with eBay Inc., major U.S. newspaper publishers and cable operator Comcast Corp.
Yahoo has not revealed too many details about how the system will work, noted Kevin Lee, a veteran Internet marketer who co-founded Did-it Search Marketing. Nevertheless, he said, it seems to hold promise.
“The thing I like most about the new technology is that it improves the relevance of the ads that consumers see by combining ad elements together based on what is best targeted toward each specific consumer,” Lee told E-Commerce Times.
Display advertisements have lagged behind search and text advertisements in the ability to send consumers specific product messages. Instead, much of display advertising online has been brand messaging.
However, Yahoo’s rivals are not sitting still when it comes to display advertising. Google is buying online ad company DoubleClick for $3.1 billion and Microsoft has agreed to pay $6 billion for aQuantive.