Yahoo Expands Dynamic Ads Program

Having sufficiently fortified the technology underlying its Smart Ads program, Yahoo is now ready to roll the dynamic ads product out on its homepage. It’s also begun pitching brands on a video version but can’t name advertisers.

First developed in 2007, Yahoo’s Smart Ads dynamically assemble display ads on the fly from an advertiser’s database of offers and images. Decisions are based on factors including demographic, geographic, and user behavior. Its key selling points are higher engagement rates and a reduced production burden on agencies, both presumably leading to a higher return on ad spend.

The program has proven popular for Yahoo, which says it serves “billions” of Smart Ads impressions per month.

But it’s been an infrastructure headache. Consider that the ad decision and serving system – powered by Dapper, which Yahoo bought in 2010 – can vary elements such as brand messaging, art, offers, products, and store locations. All those calculations place a drag on load times, not to mention accuracy and quality – standard components of Yahoo’s service-level agreements with ad buyers.

These and other backend hurdles are the main reasons Yahoo hasn’t yet offered Smart Ads on its homepage, which draws upwards of 100 million unique users each month, per comScore.

Dev Patel, Yahoo’s VP of advertiser and publisher solutions, said, “We wanted to make sure product was fulfilling advertiser expectations. We need to ensure our backend is hardened to deliver very strong [service] to the homepage.”

Yahoo serves Smart Ads on its own sites as well as on sites in the Yahoo Network Plus ad network, which represents so-called “non-guaranteed” inventory on both in-house and partner sites. Smart Ads do not appear on sites in the Newspaper Consortium, a network of more than 700 newspaper websites that have partnered with Yahoo on ad sales.

Yahoo has also begun pitching advertisers on a video version of SmartAds, supported by ad firm Mixpo. As with display ads, the ad format offers dynamically customized creative based on a range of data. Entertainment marketers will be among its early buyers, Patel said, since they have rich video assets and an incentive to customize creative by region – for instance directing viewers to theaters and showtimes. Yahoo could not name specific brands, however.

Video Smart Ads will not be available on Yahoo’s front page, but will appear across the rest of the Yahoo network. Advertisers will be able to incorporate buttons with the ads, leading to maps, social media feeds, coupons, and other offers.