There’s plenty of speculation over what Yahoo YHOO -1.40% will do with all that Alibaba money. One popular theory: advertising technology. The idea is that Chief Executive Marissa Mayer may want to match what Google, AOL AOL -3.90% and now Facebook FB -2.00% are doing — building out full suites of ad-buying-and-selling software.
However, that begs the question: didn’t Yahoo already build out its own ad tech “stack,” as people in industry like to describe these software lines? Didn’t Ms. Mayer make a big presentation at the Consumer Electronics Show in January where she unveiled Yahoo Ad Manager Plus, Yahoo Audience Ads and a handful of other products essentially carrying the promise that Yahoo could serve as a central hub for virtually all online advertisers’ and publishers programmatic needs?
In introducing that collection of ad tech offerings, housed under the new brand Yahoo Advertising, the company boasted in a blog post of a “unified approach to digital advertising that only Yahoo can deliver.”
The problem is, those products simply aren’t resonating in the online ad marketplace, say programmatic ad buyers and ad tech experts. Hence, the speculation that Yahoo could be in the market to buy some more ad tech.
“From our perspective, no, there has not been a ton of traction for Yahoo’s ad tech,” said Will Margiloff, CEO of the marketing technology firm Ignition One.
One top digital media buyer said he has informed Yahoo his agency is not interested in using Yahoo’s technology for buying ads programmatically.
To be fair, Yahoo Recommends–a native advertising network geared for Web publishers–which Yahoo launched last month, has been well received by the market.
Plus, Yahoo reports that 85 of the top 100 US advertisers have employed Yahoo’s new advertising technology in some fashion in 2014.
“We’re excited about the growth and adoption we’ve seen to date,” said a Yahoo spokeswoman. “Our advertising products are designed for future growth and we are continuing to develop new features in areas of highest opportunity, including mobile and video. We’re working with numerous brand and agency partners who are running campaigns through Yahoo Ad Manager Plus and who are seeing superior campaign performance using our data, targeting and optimization technology.”
Sean Kegelman, executive vice president at VivaKi, said while it is still relatively early, Yahoo’s Ad Manager Plus–which promises to help advertisers manage their online ad efforts through a single platform–is struggling to gain customers. Thus, he sees the logic of Yahoo making an acquisition or two in this realm.
“They are just playing catch up in display, and they are nowhere in video,” he said. “They need help in mobile too. There are a whole bunch of components of their stack where they need to either build or buy. It’s indicative that they are still far behind.”
Yahoo has tried to push advertisers to use its ad manager platform by dangling access to advanced ad targeting opportunities on Yahoo properties using Yahoo data. The company sees its proprietary data as a major differentiator. “Our advertising products are supported by Yahoo’s data insights, based on the daily digital habits of hundreds of millions of users worldwide. Yahoo is the only company that has rich data around search, social, interests, registration, cross-screen behavior, purchasing habits and TV viewership,” said a Yahoo spokeswoman.
But Yahoo’s scale and data aren’t enough to entice advertisers, several buyers said, because they have so many other options for targeted online ads these days–including Facebook’s new Atlas platform.
What about publishers? Part of Ms. Mayer’s pitch in January was that Yahoo would be able to help more Web publishers sell more advertising via its suite of tools. That promise was fueled by Yahoo’s renewed commitment to its own ad exchange, which Yahoo said on its blog ”provides premium publishers with more visibility and control over advertising on their sites.”
“The appetite for publishers to have a holistic view, real data on their users, and be able to understand the value of clicks–that’s all tricky to figure out,” said Moritz Loew, vice president of sales and marketing at Time Magazine and Time.com. “So it’s something all publishers need.”
Yahoo’s exchange product, formerly known as Right Media, is built upon online ad technology the company acquired back in 2007. That product saw its reputation suffer in the years prior to Ms. Mayer’s arrival.
Mr. Kegelman said that Right Media primarily has one big client: Yahoo. “It’s where you buy Yahoo Mail ad inventory,” he said.
Naturally, Yahoo would like more publishers to use its exchange and other ad tech tools. One way the company has been trying to entice publishers to use its ad technology tools has been by helping them get their users to stick around and consume more content via the Yahoo Recommends product. Some publishers say Yahoo has been using Recommends, which employs some of Yahoo’s ad buying tools, to try and entice them to test more of Yahoo’s ad technology.
Of course, as Yahoo tries to sweeten its offers for publishers and advertisers, Google GOOGL -2.49%, AOL and lots of others are all trying to push their versions of one-stop-shopping for online advertising. Yet according to Mr. Kegelman, the idea that marketers actually want one ad tech company to handle all of their online advertising needs is flawed. He sees that as a concept that is being primarily being pushed by technology companies.
“It’s a fallacy,” he said. “There is no way that a client wants one company looking at all of what they are doing online.”
