San Francisco — Struggling Yahoo Inc. has signed an advertising joint venture deal with WPP Group that will let WPP holding company’s shops to buy ads on Yahoo!’s Right Media Exchange, the companies said late on Thursday.
Perhaps this deal has been planned for months, but it appears that a little pressure has once again worked wonders. Yahoo, which of late rejected a $47.5 billion unsolicited takeover bid from Microsoft Corp. merely to face a proxy battle led by activist investor Carl Icahn this week, said the deal would first involve WPP units GroupM and 24/7 Real Media.
The agreement is the newest between a major Internet portal and a holding company looking to extend its influence in the online ad world. Via WPP’s 24/7 Real Media technology, the holding company’s shops will be able to more easily buy media across Yahoo!
“In January, Google and French ad holding firm Publicis Group entered into a similar agreement.”
The multi-year agreement uses WPP’s 24/7 Real Media technology to enable WPP shops to more easily target and buy media across Yahoo!, its affiliated sites and the 24/7 Real Media ad network. GroupM, which includes Mediaedge:cia and MindShare, is the first WPP company to begin using the marketplace.
As indicated by the Yahoo deal, the search leader will work with agencies of London-based WPP in building technology to connect to Yahoo’s Right Media, an electronic exchange for advertisers and Web sites to buy and sell ad space. WPP agencies will also work with 24/7 Real Media to integrate their proprietary targeting capabilities into the platform and develop custom trading strategies, according to the companies.
In a highly designed and cost-effective basis, the strategies can be seamlessly executed through the Right Media Exchange, according to the companies.
Yahoo will also help put together a WPP marketplace that will draw inventory from Yahoo’s owned and affiliated networks, as well as from third party publishers. The Yahoo-WPP agreement is non-exclusive.
“The way Yahoo! offered to build something and co-develop it with us is interesting to us,” said WPP Digital CEO Mark Read. “That is what they brought to the table.”
Yahoo purchased Right Media last year in an attempt to expand sales of the online display advertisements favored by corporate brand marketers beyond its existing base of blue-chip clients to social network sites and other sites off Yahoo.
“More and more, we see the need for agencies and media and technology companies to work together to create a new level of value,” Read said.
Right Media is Yahoo!’s online ad exchange, matching buyers and sellers of Web inventory. The deal will enable WPP agencies to create a performance-based network, in much the same way as aQuantive built DrivePM. Read said WPP plans to use the platform on behalf of clients, rather than trade on its own.
The deal exhibits the closer collaboration needed between agencies and providers of technology platforms, Read said. WPP rival Publicis in March unveiled a partnership with Google to make the planning, buying and measuring of digital media easier.
WPP has eyed Google suspiciously in the past. Its executives publicly backed the recent bid by Microsoft to acquire Yahoo! to act as a counterweight to Google. Yet Read said WPP, which is one of Google’s largest customers, was not looking to create a separate tie with a rival. Instead, he painted the partnership more in terms of WPP’s evolution from a collection of media and creative agencies to an organization with a technology offering that can link up with other platforms.
“There is a blurring of the boundaries,” he said. “There is an integration of technology into the holding companies and cooperation between the various players.”
As the rivalry swells, agencies and media and technology companies need to work together and create a new value, according to the companies. WPP Digital officials say they are pleased to work with Yahoo and want to realize a shared vision.
Working with Yahoo, WPP will develop a WPP marketplace, giving WPP’s agencies even greater access to inventory, visibility across the market and insight into value.
“As marketers take new approaches to understand and engage consumers, we are thrilled to partner with a powerhouse like WPP to evolve and grow their digital practice with our next-generation solutions,” said Hilary Schneider, EVP of Global Partner Solutions for Yahoo! “We are committed to providing the technology, insights and media expertise required to deliver the most relevant audiences across the web and to power the seamless conversation with consumers that drives greater brand awareness, consideration, intent and most importantly – action.”
Yahoo! has attached its strategy as an independent company on developing a platform called Amp to make the buying and selling of online media easier. It is betting it can combine its publisher experience, ad network assets and tech know-how to compete with the wide-ranging platforms offered by Google and Microsoft.
“As marketers look for new and more efficient ways to reach their customers, we need to help power that,” said Michael Walrath, SVP of the advertising marketplaces group at Yahoo!
Yahoo is battling to catch Google in the online advertising market. Google governs search advertising, which ties sponsored links to results returned on people’s queries. Yahoo is stronger in the smaller display advertising market. That market, however, is expected to grow over the next few years as more advertising is tied to online video. As the market grows, Yahoo will face stiffer competition from Google and Microsoft.
The accord comes as Yahoo! continues to deal with the fallout from Microsoft’s $44 billion offer to buy the company. Investor Carl Icahn has bought up the company’s shares and developed an alternate slate of directors to pressure the company into reopening negotiations with Microsoft.
The deal is non-exclusive, and Walrath said Yahoo! would like to partner with other agencies and agency groups.