We’re fully integrated into the Yahoo! world now, and starting to do a little cross-promotion for my team’s product Direct Media Exchange with the Yahoo Publisher Network customer base. This brief blog post on the YPN Blog is the first of those efforts…
Add comment August 29th, 2007
I was a little premature back in April, because it takes some time for acquisitions of this size to go through, but Yahoo! has now completed the acquisition of Right Media.
We’ve been planning for a while, but now we can actually work together which is exciting. For those curious on what I’ll be doing, it’s continuing to lead the Direct Media Exchange product we started at Right Media while also planning cool things we can do collectively as part of the team at Yahoo! in the advertising space.
How will this blog change you may ask? Probably not much, although I’m going to listen to Jeremy Zawodny’s advice as a join the large stable of Yahoo! employee bloggers. Basically, “don’t be an idiot”.
3 comments July 12th, 2007
Yahoo! has announced the upcoming launch of a new display advertising ad type called SmartAds.
SmartAds allows agencies and advertisers to create an ad template that has “variables” in the data that can be changed depending on the user’s information. So, if you’re located in Los Angeles, you may get an ad that talks about great flight deals leaving Los Angeles in the ad. It essentially allows display ads to offer more relevance to users, which is always a good thing. Both users and advertisers should benefit from this.
It will be rolled out with a few airline advertisers first, and then hit more industries over the year.
UPDATE:
Scott Karp of Publishing 2.0 offers the best analysis of the SmartAds announcement I’ve seen thus far.
Add comment July 1st, 2007
Thomas Hawk reports on it, and it’s very cool and adds a ton of relevancy to Yahoo! Image Search. In the past when searching for images I’ve usually had to try searching Flickr directly and then also using Yahoo! or Google image search. Now it can be done in one place. The Flickr acquisition is turning out to be a great one for Yahoo!.
Add comment June 26th, 2007
As an avid reader of the Oregon Ducks Rivals site, it was with great interest that I read tonight that my soon-to-be employer has purchased Rivals.com.
Seems to be a safe buy to me. Rivals has a track record of success now, a growing subscription business, and more pageviews in which to put ads. As I pointed out recently, there is a lot of value in the advertising wars of owning and operating your own content. Rivals produces a ton of content, video, and each team site it’s own community and mini-social network.
Congratulations to the team at Rivals.com.
Add comment June 20th, 2007
Since I haven’t even started working there yet I don’t really have an opinion on this, but Yahoo! announced big news today that Terry Semel is stepping down as CEO and Yahoo! founder Jerry Yang will be stepping up to the CEO job with Sue Decker moving up to President.
Seems like this will have a positive effect on Yahoo’s stock as Wall Street seems to have fallen out of love with Semel. Will Yang bring more of an engineer focus to the company?
Add comment June 18th, 2007
It’s been a crazy couple of months. Not only did my
Conversion Rater › Edit — WordPress2007/04/29/yahoo-acquires-right-media-im-a-yahooligan/”>employer agree to be acquired by Yahoo!, but our competitive landscape has changed dramatically with Google acquiring Doubleclick, Microsoft acquiring aQuantive, WPP acquiring 24/7 RealMedia and AOL acquiring AdTech AG to go along with what they already own in Advertising.com.
Additionally, there are still some other large players who are also in the game such as News Corp./Myspace/Strategic Data Corp, and IAC/Ask.com.
Obviously this is a big land grab for these large companies, combined with trying to get innovative companies who are pushing things forward in online advertising. The Wall St. Journal talks about the ad exchange concept and how it relates to these acquisitions.
The media and blogs have been covering these stories quite a bit, but I’ve seen a lot of writers and commenters really not having a great gasp on what pieces of the advertising business each company has now, how they all stack up, and what it all means going forward. So, I’ll try and help out.
Who’s Got What?
After the acquisitions are all complete, we need to stack up all the areas that matter in the online advertising battle that’s taking shape. (A checkmark means they have an asset, the 1/2 means they do to some extent but not to the same level as the other companies).
| Asset | Yahoo! | MSFT | WPP | AOL | NewsCorp | IAC/Ask | |
|---|---|---|---|---|---|---|---|
| Search Inventory |  | | | |  | | |
| Search Ad Platform | | | | | | ||
| Contextual Network | | | | | |||
| Display Ad Network | | | | | | ||
| Ad Serving | | | | | | | |
| Ad Exchange | | | |||||
| Ad Agencies | | | | ||||
| Owns Own Content | | | | | | |
Now that we have our handy chart, let’s break it down by asset.
Search Inventory
This refers to the company actually owning search engine ad inventory, which basically means do they have significant search results in which they can show ads against. Search inventory is generally very valuable to advertisers and generates good revenues for the company because users often have an intent to buy or act and the technology can match ads to their intent.
Google is the king here with over 60% of the market with Yahoo also having a nice chunk, then it tapers off with Microsoft and and IAC/Ask.com. We’ll give News Corp. a 1/2 because Myspace does have a search feature that creates a chunk of inventory that Google currently monetizes for them.
Search Ad Platform
Just having search inventory doesn’t mean you have a good advertiser platform to monetize that inventory. Google has Adwords, Yahoo has Yahoo Search Marketing (Panama), Microsoft has AdCenter, and Ask.com has their Sponsored Listings. We’ll give AOL a 1/2 because they have a white-labeled version of Adwords to buy their search inventory separately.
Contextual Ad Network
Now that we know who has strong search ad platforms, do they have a publisher network in which they can give their advertisers additional reach through placing contextual ads on publisher sites? Google leads the way here with Adsense being the strongest ad network. Yahoo! has the Yahoo Publisher Network which has played second fiddle to Adsense but has a strong publisher base. Microsoft has announced a beta of their publisher network, but as far as I know isn’t accepting invitations from it anywhere so it gets a half point. Ask.com rounds out the group with the announcement of their contextual program as well, although I haven’t seen this in action anywhere either so we’ll give them a half instead of a full check mark.
Display Ad Network
While contextual networks are great, they aren’t the only ad game in town as the display ad has continued to be the leader in high-dollar brand advertising, and has also made a strong run over the past few years in direct response. Ad exchanges, optimization, and increased use of data and technology has allowed the display ad to make a comeback. Although some would argue that it never left.
I was tempted to give Google a half mark on this one, as their display advertising efforts through Adsense haven’t set the world on fire, but their acquisition of Doubleclick makes it fairly obvious that this asset will exist fully in the arsenal. While Doubleclick isn’t an ad network today, it’s likely Google is going to integrate/leverage display capabilities to have a serious display network.
Yahoo! has such a vast amount of content and so many properties that they essentially are an ad network just on their own site. To add on though, in the agreed acquisition of Right Media they also add on a good sized network in Right Media’s Remix Network. Additionally, the Right Media Exchange has over 60 ad network clients, so the display ad network business is definitely a strong point for Yahoo! moving forward.
Microsoft is now a stronger player in the display ad network business by buying aQuantive which has a high-quality network in DrivePM. They also have started to act a bit like a network with representing Facebook’s inventory. WPP is a player with the acquisition of 24/7 Real Media which has a strong display ad network. AOL definitely gets a strong checkmark as the owners of one of the largest display ad networks in Advertising.com.
One could argue that News Corp has a display ad network of it’s own properties such as Myspace, FoxSports, Scout.com, AmericanIdol.com, etc. However, they’ll get credit for that in the “Owns own content” category. IAC/Ask is in a similar situation with the content properties they own, but neither are quite display ad networks (yet).
Ad Serving
Having networks is a primary driver of revenue due to the nice margins, but there is an extreme amount of power when you control the ad serving infrastructure of the web. It’s another example of how the online advertising wars are playing out on many fronts. It’s usually quite easy for publishers and advertisers to switch ad networks they work with, but there is usually a much deeper integration with your ad serving partner.
Google has long been rumored to be building their own ad server, but the Doubleclick acquisition gives them both advertiser and publisher ad serving. Yahoo! has had a strong internal ad server for a long time, and the acquisition of Right Media gives them an immediate ad server to offer to clients as well. Microsoft is now fully capable with the Atlas and Accipter ad serving platforms being part of their acquisition. Atlas is one of the leading advertiser and agency ad serving platforms, while Accipter is stronger in the publisher realm. WPP brought 24/7 Real Media’s Open Ad Stream ad serving platform into their war chest, which has a strong publisher base as well. AOL also purchased Ad Tech:AG, a German ad serving firm that will be part of their Advertising.com unit. One would have to think they have plans to roll this out and start pushing their own ad serving technology.
News Corp comes in with a half-check due to their acquisition of Strategic Data Corp. It’s not clear yet whether they wanted to just own that technology internally, or actually ever roll it out to any clients.
Ad Exchange
Perhaps my favorite piece of the puzzle! Right Media’s success combined with Doubleclick announcing their own soon-to-be exchange, and general buzz about exchanges everywhere leads me to believe it’s a key piece of the advertising wars. Why? Well, exchanges remove friction, connect partners, and provide a common trading platform in which all the players can benefit. Whoever can build the largest and most successful exchange will continue to attract buyers, sellers, and brokers of all shapes and sizes which will grow their advertising ecosystem. An exchange also can tie in to the other categories in this post such as ad networks, ad serving, and other technology.
Google gets a half-check because they have an exchange in the works with their acquisition of Doubleclick. It’s not a full check because it isn’t launched yet, and I’ve heard rumors from some that it could just be more like a big ad network. Without knowing all the details, it didn’t make sense to give them a full check yet. Yahoo! gets the only full checkmark in this category by acquiring Right Media. Right Media is a full-blown exchange, has been for over two years, and has over 20,000 companies buying and selling via the technology to the tune of over 120 billion ad impressions per month.
Ad Agencies
Ad agencies are important because they are essentially the controllers of the majority of brand advertising dollars spent on the web today. They choose the tools and platforms they want to work with, and those companies benefit and will continue to benefit in the future by getting more access to the ad spend from the agencies. While I don’t think it’s totally necessary in the advertising wars to actually own agencies as a couple of companies now do, but it is important to have your ad tools and platforms in heavy use by the agencies in order to get more access to the dollars.
Beyond having agencies buying from Adwords, Google now has their hooks more in the agency market from the DART For Advertisers product they control from the Doubleclick acquisition. DART for Advertisers is one of the most commonly used ad servers in the agency world. Yahoo! does have agencies buying through Panama, but currently has no tools being used by agencies beyond that.
Microsoft is now an agency powerhouse. Not only is the Atlas ad server an agency favorite, they also now own a significant share of the agency market from the aQuantive acquisition. It’ll be interesting to see how the agencies owned by Microsoft choose to work with the other major players in the space. WPP is a conglomerate of agencies, so it’s safe to say they’ve got this business covered. Will their agencies adopt Open Ad Stream as their ad server of choice?
Owns Own Content
One thing that I think is sometimes lost in all this is the power of the companies that own and control their own content. It puts you less in the position of relying in outside companies to actually have a place to serve your ads and provide advertisers value. It also allows you to test and develop using your own properties instead of having to put clients through it, and it can be leveraged in many other ways such as behavioral targeting.
I didn’t clearly define whether search results count or not as owning your own content. However, Google obviously leveraged this a great deal by getting advertisers to advertise on their search results that they then can also push out through their content network. Either way, Google qualifies for a full check since they’ve also continued to grow their services like Gmail and Google Calendar where they can show ads, but also in acquiring YouTube.
Yahoo! is the big daddy of owning your own content. The Yahoo! properties are vast and large and in almost every key vertical. As strong as Google is in search, Yahoo! holds a similar edge in content ownership. An example of the properties they own which usually fall right around the top of all web properties in each vertical: Yahoo! Mail, Yahoo! Finance, Yahoo! News, Yahoo! Sports, Yahoo! Search, Yahoo! Calendar, My Yahoo!, del.icio.us, Flickr, Yahoo! Answers, Yahoo! Video, etc.
Microsoft is also strong in the content game with MSN, Hotmail, MSN Search, etc. They aren’t quite up to Yahoo’s level but are a serious player. AOL is similar as well with all the AOL verticals and properties and definitely deserves a full check. News Corp is good as well with the behemoth known as MySpace, Fox News, Fox Sports, Scout.com, AmericanIdol.com, etc. Not to be left out, IAC is yet another strong content player with Ask.com, Ticketmaster.com, Match.com, CitySearch, CollegeHumor, and more.
Summary
Where does all this leave things in the battle for online advertising supremacy? Assuming all the acquisitions go through, there is the integration challenge for each company to go through, as well as prioritizing what they’re going to execute and how. Then they actually have to go execute on it. It’s impossible to call a winner at this point, but looking at the chart it’s clear to see that Google and Yahoo! are the best positioned to fight out the battle, with Microsoft also close enough to keep their name in the mix.
Looking at Google and Yahoo! specifically, they each have some strengths and weaknesses that will make it very interesting. Google has the advantage in search monetization, the Adsense network, and in ad serving. Yahoo! has strengths in their owned content, ad exchange, and display ad business. Which company can close the gaps on the other, and who will move forward with the right strategy over the next few years? Only time will tell, but you can bet it’s going to be fun to watch and participate in. I also wouldn’t count out the other players such as News Corp, AOL, etc. as they are all capable of making moves, and are each very successful in their current strong areas at this point. We also may see many deep partnerships come into play instead of having each company trying to own their own asset. Let the fun continue.
3 comments June 18th, 2007
Yahoo! announced today that the Yahoo Search Marketing advertising platform (Panama) will be opening up to give developers and companies free and open access to their APIs.
Exactly the right move in my opinion, even if I may be biased on this one. By making it as easy as possible to build software, tools, and systems to buy advertising through the Panama platform Yahoo! can really only win more market share with the move. You can’t make everyone happy with your user interface, and there are search engine marketing companies out there who build their own custom software for clients to work with advertising platforms. Giving these companies a free and open API almost ensures they will build upon Yahoo’s platform.
Some are questioning whether this is desperation or aiming to take down Adwords. I can say that taking an open stance is not a desperation move, but the right move. Whether it’s aimed at Google or not, that doesn’t really matter. As the current market leader anything Yahoo Search Marketing does can and probably will be spun as an attack on Google’s position with Adwords.
2 comments June 4th, 2007
Yahoo! recently announced a new contest and Yahoo! Green site to help people have an impact on living a greener life. Read the announcement for all the details, but the short summary is that they have created a contest that asks users to ask green questions on Yahoo! Answers, take a pledge on different ways you can help live a greener life, and search for some green things on Yahoo’s OneSearch. The city that has the most people participating will win a fleet of hybrid taxis and each consumer who participates gets a free CFL bulb out of it.
Besides it being a cool cause, this is a great example of how Yahoo! can leverage their properties, tools, and content to build interesting campaigns and websites. They’ve built out an educational contest and site that helps people learn, is fun to use, and leverages their other products and platforms like Answers and OneSearch. It also provides some incentive for consumers to compete in a contest, and there is a benefit to the city that wins.
Don’t think this is purely altruistic though, as I did notice targeted Ford Hybrid advertising on the site. Hey, Yahoo! is a capitalistic company right?
It brings me back to a post I made in January about Yahoo! using their tools and content to help publishers build stronger sites. There are now quite a few examples of sites Yahoo! has built in this manner such as the Green site, Wii Brand Site, and One.org.
As a publisher, I want those abilities to help build out content sites. I want to pull relevant content from Yahoo! Video, Flickr photos, Yahoo! Answers, Yahoo! Groups, and more. In exchange for all the free content and tools I’ll let Yahoo! show ads on my sites. Sounds fair to me!
Disclosure: The company I work for recently agreed to be acquired by Yahoo!
Add comment May 14th, 2007
The New York Times, jumped the gun by a few hours but the story is out that Yahoo has acquired my employer Right Media.
There’s really a lot that could be said about it, but I think generally the most important thing is that I’m extremely excited to work with Yahoo to accelerate the exchange model that we’ve been developing at Right Media for the last few years. And more specifically to work with the Yahoo Publisher Network team to expand upon everything they’ve built and what my team has built in our Direct Media Exchange product.
Here are some questions you may be having:
Why did Yahoo acquire Right Media?
Well, we should probably ask Yahoo! specifically, I won’t speak for them. I’ll link to their comments as they come available. But so far Terry Semel said this:
“The acquisition of Right Media will further Yahoo!’s goal to create the industry’s most open, accessible and vibrant advertising marketplace, which will help democratize the buying and selling of digitally enabled advertising,” said Terry Semel, chairman and CEO of Yahoo!. “This acquisition is an important step in our long-term vision to build the industry’s leading advertising and publisher ecosystem. We believe that Yahoo!’s open approach is a clear differentiator from others in the industry and provides significant benefits to advertisers, publishers and Yahoo! itself.”
What does $680 million for 80% value Right Media at?
$680 million for the remaining 80% that Yahoo! didn’t yet own is equal to an $850 million in total valuation.
What does this mean for the Direct Media Exchange product?
We can’t start working with the team at Yahoo until the SEC approves everything, but we’ll be working on making Direct Media Exchange better in the near term as well as working with Yahoo to build new and improved publisher solutions.
What does this mean for you personally?
Hopefully all good things, I’m excited to work with Yahoo to build better solutions for publishers and learn from all the incredible people there. Yahoo will now have an office where we are in beautiful Eugene, Oregon.
Obviously I’ll keep everyone up to date as I can.
More coverage:
18 comments April 29th, 2007
