At CES earlier this year, Yahoo CEO Marissa Mayer announced that the company would overhaul its ad business to provide marketers with more opportunities to reach their audiences. Since then, Mayer has made good on that promise with the launch of Gemini and the introduction of native placements that integrate within Tumblr and other platforms – but Yahoo isn’t done yet.
Yahoo has begun to formally roll out image-rich, native ads that will run across Yahoo’s personalized streams, article pages and image galleries. Served via the Yahoo Gemini platform, the ads are innovative in that they are designed to be mobile-first.
While the ads will be marked as sponsored, they will look and behave similar to the content that surrounds them. When a consumer clicks on the image ad, they will be taken to the brand’s site or served a full-screen visual with the goal of maximizing impact and recall through improved integration with Yahoo’s content.
How the new mobile ads will impact Yahoo’s ad business
Mobile-first native ads will influence Yahoo’s advertising suite in a number of ways:
- Yahoo’s mobile ads are rapidly evolving from traditional display to native. Historically, mobile placements on Yahoo’s owned channels were banner ads that were bought via negotiation between the publisher and the marketer. However, Yahoo is in the process of phasing out traditional mobile banner ads, and these dynamic native ads incorporated into content will fully replace those opportunities.
- Mobile inventory will be sold in an auction, instead of via guaranteed placements. The new image-rich ads will serve exclusively from Yahoo Gemini, where all placements are bought with a bid and sold either at a CPM or CPC. This replaces display’s traditional buying process of guaranteed image inventory.
- The new image-rich ads will transform Yahoo’s content streams across all devices. In the past, Yahoo Gemini’s native ads (previously called “Yahoo Stream Ads”) could only pair text with an image limited to 82×82 pixels. With these newly announced native ad formats, marketers can opt to run expanded images of 1200×627 pixels instead. Since Yahoo currently runs the same ad and image across smartphone, desktop and tablet, the change will apply to all devices. This could positively impact click-through rate for Yahoo Gemini’s native ads, as larger images typically increase user engagement.
How the new mobile ads will impact marketers
Here are some of the key marketer implications:
- The Yahoo news underscores a broader trend in which native ads are growing in importance. Native ads are not new, and publishers like Buzzfeed have been using them for some time. Yet according to a recent survey, 73 percent of marketers are unaware of what native advertising is, and only 9 percent allocate budget against it. As Yahoo continues to phase out display products and push native advertising on smartphones, marketers should educate themselves around native opportunities in mobile, especially as Yahoo’s mobile traffic will eclipse desktop soon.
- Marketers will need to continue to be creative and selective in their partnerships. Yahoo’s new image-rich mobile ads will be a natural fit for some marketers (e.g. a travel marketer can easily integrate images within a travel-related page or gallery) but not others. Brands without a clear way-in to image galleries will need to develop ads that creatively work in conjunction with the image gallery’s content or run across other types of placements.
- Performance on Yahoo’s content streams could change for the better. Since marketers now have the option to pair a larger image with Yahoo content stream ads, the placement’s performance could improve moving forward. Click-through rates are likely to increase, as users engage more with the larger image. These shifts might influence spend and back-end performance metrics.
Yahoo’s move away from traditional display ads on smartphones and push for image-heavy native ads shows that the company is aggressively following through on its promise to reinvent its ad placements. Marketers should evaluate whether these opportunities make sense for their brands and objectives, while continuing to monitor the company’s next moves.