SmartAds combines Yahoo’s existing demographic, geographic, and behavioral targeting facilities with its new creative ad assembly platform, enabling marketers to offer real-time personalized ads to web users, based on the individuals’ age, location, and online activity. Marketers will be able to create an ad template with several variables, such as background color and logos or contact information that can then be compiled on the fly based on web users’ specific interests. For example, instead of displaying generic contact details to someone identified as being located in a specific city and looking for say, an Audi car, the ad can include details of a local Audi dealer. The aim is to make ads relevant to the content being viewed.
According to Yahoo, SmartAds makes display advertising more of a direct response vehicle than just branding. SmartAds will be offered to the travel marketing sector initially, with two airlines and several travel aggregators adopting the service at launch time. The ads will appear on Yahoo’s network of publisher sites. In time they will also appear in the newspapers Yahoo has advertising partnerships with, and on the Comcast and eBay web sites. When Yahoo completes the $680m transaction to acquire online ad provider Right Media, the plan is to display SmartAds on Right Media’s advertising network.
Although growth in display advertising is slowing overall, research from eMarketer predicts that the market for targeted ads will double between 2007 to 2008 to $1bn, rising to $3.8bn in 2011. SmartAds is a proactive move to capture market share, but Yahoo is not the only player moving on the area. Microsoft is also addressing the sector with its $6bn Aquantive acquisition, and Google with its $3.1bn DoubleClick purchase.
Yahoo is losing out to Google in search and search-based advertising, factors that are contributing to its slowing revenue and sliding stock.
