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Yahoo Announces Revamped Ad Business at CES

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At CES this week, Yahoo CEO Marissa Mayer announced a major overhaul to Yahoo’s ad business that will present marketers with expanded opportunities to reach their audiences across the web.

The updates will catapult Yahoo further into the ad tech space by evolving the automated buying capabilities afforded by its ad products and giving innovative marketers the chance to test-and-learn in new arenas. This post outlines the key headlines coming from the Yahoo camp in Las Vegas.

What happened?

Yahoo is overhauling much of how it will do business in the near and long term. The news follows a disappointing growth year for Yahoo, during which Mayer herself was quoted as stating that “the rise of automated buying had hurt Yahoo’s display ad revenue.”

For starters, Yahoo is doing away with the names “Genome” and “Right Media,” focusing on unification of those sub-brands into a singular Yahoo Advertising experience. Genome will be rebranded as Yahoo Audience Ads and Right Media as Yahoo Ad Exchange, signaling that the company is shifting its focus to ad tech.

This means that the ad exchange Yahoo acquired some time ago and rarely iterated on will allow more publishers to set up private exchanges. In vein with this development, the company will also launch Yahoo Ad Manager – an automated ad buying tool.

Yahoo has also promised to better monetize Tumblr, pushing more ad tech into the media opportunities offered via the social platform. With this update, advertisers will be able to more precisely target audiences and will only pay when their ads generate actions such as re-blogs, follows and likes.

The decision to only charge for established engagements is likely to encourage display marketers to rethink their creative strategy on Tumblr given the social nature of the platform, and also streamline ways for advertisers and publishers alike to do business more swiftly and with less error and waste.

Additional Yahoo updates from CES:

  • Yahoo has acquired Aviate, which uses signals on Android devices to anticipate or understand a person’s context such as Wi-Fi, GPS, Accelerometer or Time. It then surfaces information at the moment it becomes useful.
  • Yahoo launched Y! News Digest (formerly Atom) for iPhone and iPod Touch. The app presents a handful of news stories that are tailored to user interest, as informed by an algorithm.
  • Yahoo also launched new Yahoo! Food and Yahoo! Tech digital magazines that provide bite-sized stories with engaging videos and images curated from Flickr and the web.
  • The company also shed more light on Yahoo! Smart TV, its connected TV platform already in use in millions of households today.

Why is it important?

Yahoo’s refocus on ideation and process will present interesting and exciting short-term opportunities for advertisers who are less risk adverse and willing to foray into programmatic with a test-first/fail-fast mentality. Some brand verticals that could benefit from this immediately include, but are not limited to, Finance, Automotive Retail and E-tailers.

The unification of platforms – along with a newly-established focus on automation – will make it easier for advertisers to buy media with less waste and may offer up new opportunities to “bring your own data.”

For Yahoo, it could reduce time fixing process issues so that resources can focus on product innovation, measurement (cross-channel, device) and developments to help Yahoo get a leg-up in the cookie-less world that the industry seems inevitably headed towards.

Yahoo’s new commitment to private exchange improvements and openness marks a step in the right direction to meet advertiser demand for more visibility and control, while letting the market help decide prices.

Marketer Implications & Next Steps

Although Mayer did not indicate when these sweeping changes to Yahoo’s ad products would be formally implemented, we believe – based on our own experiences with Yahoo as a strategic partner – that the updates will be abrupt – and for the better.

As product naming conventions change in the coming weeks and months, expect some initial restructuring on the Agency and Publisher sides alike, both from a buying and finance perspective.

The focus on content and content/app distribution should help Yahoo better compete with Android and iPhone platforms, in addition to other innovations launched by its competition in 2013.

Moreover, as more inventory becomes available via automated buying methods, there may be added strain on the typical IO buy from an availability and inventory composition perspective.

In the interim, marketers should consider the underlying implication of the announcement: automated buying methods will become paramount to the success of media strategies in 2014 and beyond. Advertisers will want to begin testing, learning and adjusting as soon as possible to get ahead of the coming updates.

Cover photo via Adweek