Yahoo’s Smart Ads
Yahoo’s Smart Ads advertising program
1) Behavioral Targeting
Yahoo’s new Smart Ads program takes internet marketing to a new level. Smart Ads customizes ad banners on the fly and relies entirely on behavioral marketing. According to Yahoo’s Brad King, Yahoo members are categorized by their behaviors i.e. their search habits, buying habits, likes and interests and thus put in “behavioral buckets”. These buckets can be tapped and access is given to them (for a price) by Yahoo’s Smart Ads.
2) How it Works:
Say, for example, you’ve been searching the internet for fares for a trip you’re thinking about taking to San Francisco in September. More than likely you researched the travel-related websites of airlines, hotels, restaurants, and entertainment hot spots. You might have even checked out a forum to see what the locals do there and possibly visited a job site or two. Every move you make online is tracked and cached and it tells a lot about who you are and what you’re doing. All of this information (any other information Yahoo has accumulated about you over time) places you in one of those “behavioral buckets” which advertisers view as “buckets of potential gold”.
3) The Next Step:
What happens after that is genius. You might start seeing a banner ad in your Yahoo mailbox from an airline offering special fares directly to the city to which you’re traveling, or a pop up ad for a local hotel promotion on the very dates you’ll be in town, or a rich media banner ad touting the nightlife of your destination. Yahoo thinks you’ll be much more apt to click on those ads if you’re already thinking about planning a trip. They’re probably right and, thus, you have the essence of behavioral targeting. Yahoo’s Brad King tells me upfront testing reveals the conversion rate of a Smart Ad is 5x greater than a less customized ad. If this holds true Smart Ads will be a huge success.
4) Challenges:
The greatest challenge lies in the complexity of behavioral targeting. Every Smart Ad will have to be customized because advertisers are targeting different messages to different people. This is time consuming and revisions to the creative product can be costly. Keniston & Company’s CEO Denise Keniston says, “Certain content management tools and the wealth of creative talent right now make Yahoo’s Smart Ads a very viable option.”