Bartz Blunt on Inefficiency of Online Ad Buying and Management

Yahoo CEO Carol Bartz has rapidly gained the reputation of a pull-no-punches, shoot-from-the-hip sort of chief — to some a refreshing change from the more-typical opaque industry exec. At an investors conference yesterday, she didn’t disappoint. In a wide-ranging discussion regarding Yahoo’s business, Bartz acknowledged the difficulty of buying online advertising, something many online ad sellers would rather not admit.

“The problem with online advertising, by the way, is not all this targeting and so forth,” she said during the Bank of America and Merrill Lynch 2009 U.S. Technology Conference in New York Wednesday. “The problem is it’s so friggin’ hard to buy,” she continued, in her characteristically colorful manner. “You try to spend $3 million online, it would be days of people trying to enter it into the system.”

Though she expects Yahoo’s ad management system to improve ad buying and planning efficiency in a year or two, she was blunt in stating that ad buying “friction is horrible,” and lamenting — perhaps hyperbolically — that it takes “32 steps to put a simple ad up.”

Indeed, ad buyers have long complained that online ad buying and planning is far more complicated than traditional media buying. However, it is rare to hear a CEO of one of the biggest online ad sellers stating it so curtly.

She indicated Yahoo has been successful in facilitating better ad creative, one hurdle to growing the industry. Yet, she suggested another obstacle to more robust online ad sales is campaign measurement. “Metrics could be a lot better,” she said.

Data on the whole has long been considered somewhat of a double-edged sword for online ad sellers, forced to be judged by data other media cannot provide. “We have almost too much data and not enough information for our clients, and that’s stuff we’re working on on the ad side,” said Bartz. She believes Yahoo could enable smarter ad targeting if demographic and other data were applied in different ways.

Though previous Yahoo chiefs have stressed its search business, Bartz downplayed search. “We’re not a search company; we’re a company that serves up and amalgamates things on the Internet for people,” she said. To her, Google’s dominance in search has less to do with technology and more to do with its strong brand. “Frankly [Yahoo’s] technology isn’t really that much different from Google,” she said.

Bartz also seemed skeptical of search advertising’s ability to serve brand advertisers, stressing that display is more conducive to branding campaigns. “The bad side [of search] is your brand is not defined by 20 keywords,” she said. “[Brands] have to put a persona out there�The way you put a persona out there is to be able to present something, and that’s what display advertising is.”

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