The offering makes heavy use of behavioral, demographic and location data.
For many large marketers, the promise of behavioral, demographic and geographic targeting has been stymied by the problems of scaling up creative and keeping ads current with one's database of offers.
Yahoo has taken a step to ease that problem by allowing advertisers to provide it with creative assets and a direct feed of available offers, which the company will then assemble and serve to users across its network.
Increasingly, the easy part is identifying audience segments and sub-segments, while the hard part comes when trying to create hundreds or thousands of ads aimed at those individual groups, and then keep those ads current as promotions and prices evolve. Yahoo said the new product, called SmartAds, will ease the production burden on creative agencies and accelerate the process of identifying and reaching users when they're in-market for a product or service.
"Many marketers haven't had the ability to tailor their display advertising messages at scale for different segments," said Yahoo spokesperson Gaude Paez, who described SmartAds as "Real-time custom advertising."
"It's not just about marrying the creative information and the targeting," she added. "Our platform can allow them to give us those data feeds," and hence to change ads as quickly as offer structures change on the back end.
SmartAds makes heavy use of "customer insights" extracted from data Yahoo keeps on visitors, including their shopping, searching and Web surfing behaviors, as well as registration information and location data. The portal hopes the move will encourage large direct marketers to invest more heavily in online display ads, Paez said.
Yahoo is taking a phased approach to the rollout. SmartAds will at first be available solely within the travel vertical, where the appeal of slicing and dicing Yahoo's audience according to geography and previous behavior is obvious. Early advertisers testing the system include "two of the top three" national airlines and some online travel aggregators. Other verticals high on the company's priority list are in the retail and automotive sectors.
Yahoo will offer both CPM and per-click pricing for SmartAds, but Paez declined to elaborate on how it would determine pricing or whether the payment structure would differ from the company's existing pricing models for campaigns using behavioral and other modes of targeting. She also said it's too early to say how much ad inventory overall may eventually be delivered using the SmartAds system. Yahoo is also pursuing a patent on the new system.
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Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects.
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