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December 1, 2005

Yahoo outlines online ad business strategy

Another day, another online business model. Yahoo is now planning to boost the effectiveness of its advertising and rates by targeting ads to users based on their surfing behavior on its site.

By CBR Staff Writer

Traditionally, Yahoo’s advertising targeting has focused on customer demographics or geographic location instead of behavior.

But if behavior is tracked, then advertisers can be charged more for placement of the right ad at the right time at the right place.

The firm tracks a few types of behavior by its users, including search queries, movement through Yahoo sites and the specific ads clicked and uses this information to decide on the fly what ads are most appropriate for a user.

The new, new thing at Yahoo, even though we’ve had variations of this, is getting much more into behavioral targeting, said Yahoo executive vice-president Greg Coleman.

Coleman also reckons that Yahoo has a major advantage in offering both text-based keyword search advertisements and graphical, brand-reinforcing ads. The biggest opportunity I see in the changing landscape is the very significant lead that we have in both channels, he said.

This gives the company opportunities to cross sell the two types of advertising to corporate customers who tend to prefer one or the other of the two online ad categories. Only 50 advertisers of the top 200 in either advertising category rely on Yahoo for both services, he said.

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