Yahoo Opens Smart Ads to Third-Party Vendors

Yahoo has opened its Smart Ads platform to third-party technology providers. The first two such vendors to take advantage of the policy are Teracent and Tumri, though others are expected to follow.

Yahoo first introduced its Smart Ads dynamically targeted ad offering in in mid-2007. The product allowed advertisers to switch out ad creative based on a user’s preferences, behavior, or geographic location.

“What we’re going to do is focus and concentrate our efforts on our core competency and core strength” in audience sales, said Mitch Spolan, VP of field sales at Yahoo. Yahoo recorded 167.1 million unique visitors in April, according to Comscore, while sites hosted on the Yahoo domain corralled 149.1 million uniques.

Teracent and Tumri each offer technology that populates ad creative with dynamic content. Yahoo plans to work with additional technology providers, each of which will be subject to a certification process. Vendors with similar technologies include Dapper and 1020 Placecast.

A handful of advertisers, including Travelocity and Hewlett-Packard, have tested third party technologies with Yahoo’s Smart Ads product. While Travelocity has an eight-year relationship with Yahoo, the test was the advertiser’s first use of Smart Ads. Kyle Sawai, principal at Travelocity agency ClickHere, noted the technology is not new. Rather, he said what’s interesting is the implementation and scale. “Yahoo and Teracent have…found scale that works for the metrics that we need to hit.”

As a result of the tests, one of Travelocity’s Smart Ads campaigns achieved a 79 percent decrease in cost per transaction, a 230 percent increase in transaction volume, and a 651 percent increase in click-throughs over previous campaigns using static ads.

ClickHere previously executed Smart Ads for Centex Homes and MetroPCS. The agency is looking at deploying it for GameStop, and is in discussions with additional clients.