Yahoo launches Smart Ads to further tailor display ads to audiences

Yahoo has launched Yahoo SmartAds, an advertising platform that allows marketers to deliver tailored display ads to their audiences. In tests conducted on Yahoo FareChase, SmartAds generally resulted in click-through rates that were two to three times higher than static, non-customized display ads using the same targeting and placement.

SmartAds combines Yahoo’s consumer insights and rich media capabilities with new ad serving technology that converts marketers’ creative campaign elements and targeted offerings into customized and relevant display ads.

For example, if a user is browsing for hybrid cars in Yahoo Autos and has selected San Francisco as their default location in Yahoo Weather, Yahoo’s SmartAds platform can assemble and deliver a display ad in real time that shows a hybrid vehicle from a major auto brand, as well as local dealer information and current lease rates.

“Yahoo’s long-term vision is to build the industry’s leading advertising and publishing ecosystem  both on and off Yahoo’s network  and transform how advertisers connect to and engage with their customers,” said Gaude Lydia Paez, director of corporate communications at Yahoo Search Marketing, Sunnyvale, CA.

“Through Yahoo Smart Ads, we aim to attract more direct marketers to display advertising and help create more value from the inventory of our [owned-and-operated] properties, our strategic partners and the Right Media exchange,” Paez continued.

David Kenny, CEO of digital and direct marketing agency Digitas, said SmartAds allows marketers to measure click throughs, transactions, path analysis, and behavioral analytics. The product allows marketers to measure better and be more targeted.

“With SmartAds, we can vary offers for different segments,” Kenny said. “It is quite easy to use, you just have to develop enough variations.”

SmartAds is powered by Yahoo’s behavioral, demographic and geographic targeting capabilities, which connect users with what they are looking for based on their expressed interests.

“The improved targeting and ad relevance should increase the click-through rate and conversions that advertisers see with SmartAds compared to standard display ads,” said Martin Laetsch, senior director of search strategy at SEMDirector, a provider of search marketing automation software. “This increased response rate will increase the value of SmartAds to advertisers and will enable them to pay higher rates for these ads. They are currently selling SmartAds with both CPC and CPM pricing, but higher conversions may encourage Yahoo to offer [cost-per-acquisition] pricing.”

“This allows marketers to target users and deliver tailored creative “on the fly” as they present themselves,” Paez said.

Yahoo is making SmartAds available first on its owned and operated properties to travel industry advertisers in the United States.

The clients currently using the product have requested that they not be named for competitive reasons, Paez told DM News.

“I think until now the most targeted form of direct marketing was search,” Kenny said. “But search places limits on creative. Now we are merging display and search, that enables a lot of ad dollars from brand marketers.”

Laetsch agreed, saying if this works, he sees Google and Microsoft following suit.

“This is an interesting convergence of display and direct response advertising,” he said. “It won’t change all display advertising, but if done correctly it has the potential to revitalize display as a viable ad type.”

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