Yahoo’s open embrace

June 4, 2008

decker.jpgThis is not an entry about Microsoft. It is an entry about Yahoo’s wagon-load of new ad partnerships announced today and what we learned about the future of online advertising exchanges. Basically, Yahoo executives told us they are trying to build a more open, more social Internet strategy vis a vis consumers and advertisers.

On the consumer side, expect Yahoo to rewire its sites, email and instant messaging so that users can manage information about themselves and their friends in a single place. 
At a lunch with reporters after speaking at the Advertising 2.0 conference, Yahoo President Sue Decker said those changes would become apparent late this year and early next year.
For advertisers, some of the new partnerships announced on Wednesday include important tie-ins to Yahoo’s Right Media Exchange, where online ad space can be bought and sold more efficiently, based on the laws of supply and demand in force everywhere else.
The ideas are part of a bigger shift away from expecting viewers to come to a given site, toward extending your services out to wherever your users may be.
“It feels like the industry is ripe right now for contributing to a larger ecosystem,” Decker said.
Right Media’s Mike Walrath put it diplomatically, suggesting the days of publishers or other parties who try to control their own ad pricing in an open market could be numbered.
“If your business is based on inefficiency, and as the market becomes more efficient … some models will strengthen,” he said.

Media agency Havas Digital is participating in one of the new deals, agreeing to build a proprietary ad trading platform based on Yahoo’s technology. Havas Digital CEO Don Epperson told us in an interview that Havas had been working with Yahoo on this for nearly 9 months, and called Yahoo’s attitude refreshing.

There’s really a new attitude where they want to be open … I think it’s some publishers out there, they very much view their technology as proprietary and therefore not open. They also want to give most information to their own sales staff and not to the full general agency.
What Yahoo has made the jump to … is that the more information you give the advertiser (about the market value of prices) … we’re going to buy more where we know that we can get a good deal.

(Photo: Reuters)

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