Yahoo Gets Smarter with SmartAds

NYTimes reports that Yahoo is about to announce a product called SmartAds that would allow marketrs to create custom ads on fly based on visitors interests based on their demographic and online behaviors or actions.
The articles says
“For example, a person who had recently searched for information about blenders might see an ad from Target that gives the prices for the blenders that are on the shelves in the store closest to that person’s home.
Last week I wrote a piece on targeting passions. In that post I wrote
“However the more granular you get with your segments the reach becomes a problem. Yes there will be quality but reach might not be enough to justify the cost and efforts of reaching these targets.” One of the biggest factors in the “cost and effort” was the cost and effort for creating different creative. Seems like Yahoo’s SmartAds will resolve this issue...pretty cool. We will have to wait and see how it works, if it really delivers on it promise than the marketers dream of 1:1 marketing is one step closer.

According to NYtimes, this is how Yahoo’s new system works: the advertiser (or its agency) would provide Yahoo with the components of its display ads — including the logos, tag lines and images. The retailer would share information from its inventory databases that track the items on the shelves in each of its stores. Next, Yahoo would combine that data with the information it has about its users’ demographics and actions online to create a product-specific advertisement.

According to the article: “For airlines, SmartAds uses Yahoo’s information about its Web surfers to create display advertisements for each person that feature ticket offers with actual prices listed. In time, Yahoo plans to offer rich media advertisements where users can buy the ticket at that price right within the ad unit, rather than having to click through to another Web site.”

Web Analysts, here is something to start thinking about - offsite transactions. User will never come to you site (your web analytics tools, omniture or webtrends won’t even see the visitor), any web analytics tracking embedded within Rich Media will possibly be Yahoo’s.

Dear Publishers, this will allow yahoo to build richer set of data, advertisers make sure you own that information and not used by yahoo to empower your competitors or against you e.g. raise the CMP or CPC for you because you have higher conversion. I don’t think that should be the case but there is always a possibility.

Side Note: According to Reuters “SmartAds will operate on Yahoo's network of Web sites as well as in its advertising partnerships with eBay Inc., major U.S. newspaper publishers and cable operator Comcast Corp.”. Not sure if eBay, major newspapers and Comcast are just the publishers of advertising or will actually be pooling in user behaviors. If these publishers also allow yahoo to create better understanding of users based on their behavior on their own site, yahoo will have even wider reach and better targets. Example: A user comes to ebay looks at some cars and then browses over to a newspaper site, without even clicking on a single link on the newspaper site, Yahoo (network owner) will know this is somebody who is interested in cars. By pooling in behaviors eBay will be able to generate extra revenue stream and the newspaper will have a better target and hence higher CPM.