Yahoo Seeing Some Success With behavioural Targeting, But New "Branded Content" Campaigns Aren't Selling Well

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carol bartz yahoo ap

Yahoo CEO Carol Bartz has touted her strategy of working “to improve our relationships with them [advertisers] and to continue to deliver quality data, insight and innovative ad platforms.” 

One of these efforts is “site-side behavioural targeting,” which follows users who have viewed a particular kind of content around the site and gives advertisers more chances to reach them.

We called various agencies who told us that the Yahoo sales team is now aggressively pitching site-side behavioural targeting, which last year it barely talked about.  In addition, these campaigns are achieving some success. 

Site-side behavioural targeting enables an advertiser to only place their brand in front of users most interested in a specific type of content, regardless of the overall genre of the property in which the ad is viewed.  For example, an advertiser can choose only to advertise to gaming enthusiasts across many different verticals, not just on a gaming-specific vertical.  A cookie tracks a users’ surfing pattern to determine their interests.

An increased emphasis on targeting should help Yahoo in its efforts to increase the yield on its inventory by:

  • Charging higher rates for better targeting (we’re told the company is currently asking for CPMs 10% to 15% higher than on average run-of-network campaigns).
  • Providing additional inventory for advertisers interested in targeting a specific type of user when a given vertical, like travel for example, is sold out.

The agencies also say Yahoo has been less successful selling branded content campaigns that stress engagement over clicks.

BESIDES HIGHER RATES, THIS CREATES MORE INVENTORY FOR CERTAIN ADVERTISERS

In the past, site-side targeting was underutilized in favour of average run-of-network campaigns.  On those campaigns, advertisers could buy certain properties, but not target specific types of users across many of Yahoo’s sites.

Now, for example, advertisers interested in sports enthusiasts can still target them after Yahoo Sports has sold out (a number of these premium properties sold out during Q409).  Yahoo is offering to reach the sports enthusiasts on other verticals.  This enables the company to retain more of this advertisers’ dollars, where in the past these additional dollars likely would have been lost.

The data is limited but we’ve heard of anecdotal cases of advertisers buying additional inventory because of offerings like this.

ENGAGEMENT CAMPAIGNS ARE NOT GAINING AS MUCH TRACTION

When Yahoo announced a partnership with GroupM to produce more branded content for advertisers, we said it would have difficulty getting advertisers on board these kind of engagement campaigns at a level of scale because most agencies are still stuck in impression-based spreadsheet methods of measuring ROI. As a result, we thought it would take a long time for agencies to evolve to the point where they were comfortable with less quantitative engagement metrics.

Several agencies we spoke with appear to confirm this. 

Some pushed back on the lack of measurability because they couldn’t figure out how to quantify the ROI for these campaigns through their typical methods (read: spreadsheets shown to bosses demonstrating the money has been well spent).  Yahoo’s response is to commission a study from a third-party like Nielsen or Dynamic Logic, but no one we spoke with was taking them up on that offer.

Some of the larger brands said these types of campaigns are better-suited for smaller, niche advertisers.  With $7 Billion in revenue, it’s going to be difficult for Yahoo to move the needle with campaigns like this in the near-term, especially with Facebook arriving as a big display competitor.

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