Yahoo testing new one to one ad service

Advertising takes another leap forward.  From the Times today:

Yahoo will announce new tools for online advertising today that could pull the company ahead in the race for what is called “behavioral targeting,” that is, the ability to better tailor online advertisements to the people most likely to buy.

The product, Yahoo SmartAds, would help marketers create custom advertisements on the fly, using information on individual buyers and information on real prices and availability from the vendors. For example, a person who had recently searched for information about blenders might see an ad from Target that gives the prices for the blenders that are on the shelves in the store closest to that person’s home.

The Internet has long promised this kind of one-to-one marketing, but it has often been difficult for advertisers to customize display advertisements with a broad reach.

“Ad agencies have been really struggling with how to scale the value proposition of the Internet,” said Todd Teresi, senior vice president of display marketplaces at Yahoo. “We now can get scaleable one-to-one marketing.”

The announcement of SmartAds also comes while Yahoo is recovering from an extensive reshuffling in the executive offices, including the departure of its chief executive, Terry S. Semel, and Wenda Harris Millard, the company’s longtime chief sales officer. Yahoo has struggled to catch up with Google in search advertising and has disappointed investors with its ad sales the past few quarters.

SmartAds is one attempt to catch up. Although the technology is complex, the goal of SmartAds is simple: show the right advertisement to the right person at just the moment that he is about to pull out his wallet to make a purchase.

SmartAds is being tested on Yahoo’s network of sites — which includes local newspapers as well as its own portal — by two major airlines, although Mr. Teresi would not name them. He said the system will be offered to other industries in the coming months, including automobile companies and retailers in the fall.

The technology will also be applied for free across advertisements bought on Right Media, the online ad exchange that Yahoo purchased this spring (although the deal is still pending). The new feature may give Right Media a competitive advantage over other exchanges — like a new one created by DoubleClick, the online company that Google agreed to purchase for $3.1 billion in April. (The Google-DoubleClick merger is pending an antitrust review by the Federal Trade Commission.)

This is how Yahoo’s new system works: the advertiser (or its agency) would provide Yahoo with the components of its display ads — including the logos, tag lines and images. The retailer would share information from its inventory databases that track the items on the shelves in each of its stores. Next, Yahoo would combine that data with the information it has about its users’ demographics and actions online to create a product-specific advertisement....

Read the rest of the piece here.