Yahoo: Our ads are better

Search giant details new ad system designed to help marketers figure out what and when people plan to buy.

Elinor Mills Former Staff Writer
Elinor Mills covers Internet security and privacy. She joined CNET News in 2005 after working as a foreign correspondent for Reuters in Portugal and writing for The Industry Standard, the IDG News Service and the Associated Press.
Elinor Mills
3 min read
Yahoo's new ad system is designed to let marketers target prospective consumers not only by the search terms the people use, but also by their demographics, location and what they do on other areas of the Yahoo network, executives said.

The system, scheduled to launch in the U.S. in the third quarter, offers enhanced ease of use, advanced testing features, geo-targeting and automated analytics, Tim Cadogan, vice president of search, said during the company's analyst day in San Francisco on Wednesday.

"We're exposing more data about the quality of advertisers' listings than any other competitor," Cadogan said. The system "shows on a five-point scale how well an ad is performing," as well as which user queries indicate explicit or implied intent to shop, he added.

Yahoo faces stiff competition from Microsoft, which launched its new AdCenter system in the United States a few weeks ago, and Google, which has the largest share of the search ad market.

"There are areas where we needed to catch up; that is well-known," Cadogan said.

Yahoo can leverage its registered users and broad network of services and sites--which make it the top media Web site on the Web--to improve its advertising sales, he said.

"On the Yahoo network we can find 300,000 consumers who are very likely to be buying a car within the next 30 days," said Usama Fayyad, chief data officer at Yahoo.

For example, a user's activity on Yahoo Travel can offer more information about intent to purchase products and services than keyword searches, he said. "Many things you do on the Yahoo network tell us more about your intent...(and) let us allow the marketers to target their dollars better. This is a new kind of targeting."

Earlier in the day, Chief Executive Terry Semel said Yahoo had come a long way since he took over five years ago. Today, online advertising is estimated at more than $30 billion a year and growing, Semel said. And Yahoo has more users than any Web site in the world, he said, adding that the company is primed for even greater growth.

The big bets over the past five years for the company have been graphical advertising, search, broadband partnerships and deep product focus, according to Semel. Going forward, Yahoo will concentrate on next-generation technologies like video, as well as monetization, platforms and pushing content beyond the browser onto wireless devices and elsewhere, Semel said. "I feel more invigorated today than ever before," he added.

Chief Operating Officer Dan Rosensweig previewed a Java version of Yahoo Go for mobile devices. "We build large audiences, get them involved and monetize them," he said.

Lloyd Braun, head of the Yahoo Media Group, said the company is planning to offer licensed, original and user-generated content. "Community and personalization are going to be the key differentiators for us," he said.

Yahoo's media priorities for 2006 are to aggregate content across all its sites, simplify ad selling, provide an in-line video player that will allow Yahoo to run content and advertising on a page in a consistent way, and offer tools that will allow professional bloggers to publish directly to Yahoo, Braun said.

Yahoo also is pushing hard into social search and community, making social bookmarking a priority, said Jeff Weiner, senior vice president of search and marketplace for the company.

Yahoo owns the popular Flickr photo-sharing Web site, MyWeb social search, and the Delicious tagging and bookmark-sharing service.

Several analysts said Yahoo was staking its turf in the search market with its strategy messages during the event.

"Yahoo is saying, 'We'll move the playing field back to where our strength is: core search,'" said Allen Weiner of Gartner. "It's a statement to the business community and competitors that they are still No. 1."

"I believe Yahoo is well positioned with a large network of existing users and a rich advertising platform," said David Card of JupiterResearch.