Yahoo, Others Work to Up Relevance of Online Ads

Build Technology to Help Marketers More Effectively Reel In Targeted Consumers

By Abbey Klaassen

Published: July 02, 2007

A correction to this article is appended


NEW YORK (AdAge.com) -- Marketers are taking great pains to create better-targeted online campaigns, but the question remains: Can the creative production keep pace? After all, what good is a targeted media buy if the ad itself isn't relevant.

Using SmartAds, a marketer such as United can follow a consumer around Yahoo channels.

Several potential pieces to the solution are sprouting up from major portals as well as start-ups funded by behemoths such as British Telecom. The latest move comes from Yahoo, which is offering what it hopes will eventually help advertisers offer more relevant and personal creative to specific groups of customers.

"The question is, how do you have a brilliant idea at scale and produce versions that are tweaked and adjusted for everything from the audience's ethnic differences to prior purchase differences?" said David Kenny, chairman of Digitas and Publicis Groupe Media. "Ironically, the internet will get too expensive if you produce these in the old way."

First step: SmartAds
Yahoo's product, coined SmartAds, is admittedly a first step and a simplified approach to this problem. It switches in text-based offers and simple graphical elements on the fly, based off behavioral targeting data. And it's part of a larger trend in which advertisers will increasingly need to rely on technology to help them tailor creative in fragmented media environments.

Yahoo gave an example of SmartAds in action: A San Francisco-based user might be checking out Vegas deals on Yahoo Travel but then migrate onto a Yahoo Sports page, where he would be served up a display ad promoting $99 flights between San Francisco and Las Vegas, thanks to the behavioral data gleaned from web-surfing history. It's similar to what Visible World is doing for video content, but with Yahoo's behavioral targeting thrown in.

Todd Teresi, senior VP-display marketplaces, said what SmartAds does is marry creative assembly and targeting. "Advertisers create the creative templates and we do the heavy lifting," he said. The technology was created within Yahoo, and Mr. Teresi said the company has debated whether to license the technology to other web publishers. It will likely tap the technology for use on sites that it has selling relationships with, such as Comcast and eBay, and use the technology to help move more publishers in Yahoo's direction and further the network that the portal is trying to build.

Strong response in beta tests
In beta tests, the technology has lifted response two to three times above what ads were previously getting, Mr. Teresi said. Digitas has been testing the platform in the travel category -- which is where Yahoo is launching it -- but also use it for auto, retail and technology clients as Yahoo rolls out the offering. "We know that it works well but it's early days," Mr. Kenny said.

As the service becomes more sophisticated, Mr. Teresi expects it to be able to incorporate more advanced targeting, such as automatic optimization of creative elements -- in other words, figuring out and serving up on the fly the combination of images and words that work best against particular audience targets.

But Yahoo is not alone in trying to help marketers come up with more versions of better-targeted creative without significantly increasing the dollars they've always spent on single, mass messages.

Todd Teresi

Real Time Content, which is partially funded by British Telecom, is attempting to take on a similar challenge except with video and audio content. It hopes to serve up the most relevant content -- entertainment, news and advertising content -- on the fly based on information that's known about the consumer and is having discussions with ad network Blue Lithium to help it cull that data.

"If I'm a soccer mom and you shot this nice ad on a road in Scotland, am I likely to test drive?" asked Naj Kidwai, CEO of Real Time Content. "No. But if you shot an ad that speaks directly to me I'm likely to answer the call to action."

Disrupting the ad agencies
He admits the model costs a bit more on the front end because an advertiser might have to shoot a few more creative assets and storyboard several possible combinations, but he believes the personalization on the back end will incite people to pay attention to the message. He also said agencies might find the model quite disruptive.

"If you're an ad agency, this is disruptive," he said. "It's a complete new way of thinking about media."

Visible World allows TV and video advertisers to switch creative based on what channel it might be airing or external sales factors such as the weather. And other start-ups, such as ImageSpan, hope to streamline what can be burdensome processes, such as rights clearances for creative.

Of course, many of these solutions are more about making additional versions of ads from assets that a marketer already has. Marketers will still need to find ways to lower the actual production of those assets. Mr. Kenny said his shop is moving much of its production off-shore, where it is cheaper (that was the impetus behind Publicis' new production shop, Prodigious), or using computer- or consumer-generated creative.

At a recent Internet Advertising Bureau forum about the use of consumer-generated media and advertising, much of the talk focused around its potential to help reshape production and bring down costs.

The cost of production "is one of the last barriers to brands and agencies truly being able to communicate in a relevant way, a more micro way, on a regular basis," Tom Lynch, VP, Avenue A/Razorfish, said at the event.