Display That Performs Like Search

Yahoo! expands Smart Ads program with new partnerships

What if you had a display ad that could be customized for a target audience with a variety of images, colors or messages? What if that ad could evolve as Yahoo! discovers more about the users looking at it? And what if that ad helped your display campaign perform more like your search campaigns?

That’s what an ad can do when it’s part of our Smart Ads program, which we’re expanding this week. Smart Ads takes different elements of ads and combines them in more ways than you can probably imagine to give customized messages to prospective clients. The program now helps deliver Smart Ads at greater scale by combining Yahoo!’s reach and user knowledge with innovative ad-serving technology from third-party providers. Smart Ads is an open platform, but Yahoo! is initially working with two partners, Teracent and Tumri, to make Smart Ads available to PC and mobile advertisers.

“Other publishers will offer so-called smart ad campaigns, but if it’s not running on the Yahoo! Network, it’s not as smart as it could be,” says David Zinman, vice-president and general manager of display advertising at Yahoo!. “We’re giving marketers the opportunity to reach consumers with customized ads on the PC and mobile Internet, and given the high performance of these campaigns in initial testing, it’s as if we’ve put performance marketing on steroids.”

Get specific
You may have a particular group of advertisers you’re trying to reach. But there are lots of different kinds of people within a demographic group, with different interests and backgrounds —and not every consumer will respond to a message the same way.

For example, you could set up a telecommunications ad campaign targeting 18-to-45-year-old cell phone users in Los Angeles. That demographic could contain everyone from a 28-year-old female hipster to a 43-year-old blue-collar male. And they would all see the same ad, which might look something like this:

Yahoo! has 150 million users who spent 43 billion minutes on our site last month—which means we have a lot of data that we can use to break those groups into much smaller behavioral segments. The woman might visit Yahoo! Music to check out The Decemberists, while the man might visit Yahoo! Finance. So we can start figuring out what kinds of messages they might be interested in. (Keeping in mind our privacy policies, of course.)

That’s where Smart Ads’ machine-learning technology comes in. You could prepare a few taglines, offers, images, logos and colors, and Smart Ads technology combines them to create thousands of ads that can be displayed to your potential customers. Our mobile Smart Ads can even take into account things like the local weather.

As people like our hipster and our blue-collar guy click on ads, our systems learn what combinations people like them want to see. Is the hipster more interested in convenience and multimedia? Is the blue-collar guy more interested in cost?

In not too long, the 43-year-old man might see more ads like this:

Meanwhile, the 32-year-old female might see an ad like this:

Display that performs like search
Because these combinations can be finely tuned to match customized messages with users, Smart Ads can help the right ads be displayed to the right users. So far, advertisers testing Smart Ads have seen significantly improved campaign performance based on a variety of metrics, including click performance, conversion and overall return on investment.

For example, after executing several Smart Ad campaigns with Yahoo! and its partners, Hewlett-Packard saw a return on ad spend that was more than 20 times higher than their traditional display campaigns, and on par with their search marketing campaigns.

“The ability to run a display advertising campaign that can match the ROI of my search marketing spend is a potentially game-changing proposition,” says Catherine Paschkewitz, director of demand generation with HP Direct. “The Smart Ad solution has enabled us to increase our ROI by reaching the right set of users with the right message.”

Plus, after you’ve run a Smart Ad campaign, we can give you reporting data all the way down to the conversion that tells you which groups responded to which messages. That can help you even when you’re setting up traditional offline campaigns, and make all of your advertising that much smarter.

—Jeff Sweat, Blog Editor