Yahoo Aims to Remedy Premium Ad Slump With Self-Serve Tool

Portal Seeking $10,000-Per-Campaign Commitments for Early Inventory Access

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Yahoo is trying to lure back advertisers who have curtailed their spending on the portal's higher-priced ads. How? By making it easier to buy some of the company's most lucrative ads and target them using the Yahoo's audience data.

Yahoo is planning to introduce a self-serve version of its automated premium ad-buying tool, Yahoo Ad Manager Plus, in September, according to people briefed on the matter. A Yahoo spokeswoman said the company doesn't comment on products that aren't in the market yet.

Yahoo Ad Manager Plus gives advertisers first dibs on buying Yahoo's inventory before it's made available more broadly on the company's ad exchange to automated ad-buying tools from other companies like Google. Inventory available through YAM Plus includes the company's so-called "native" Stream Ads, Tumblr Sponsored Posts and guaranteed slots on category home pages like Yahoo News and Yahoo Sports.

Commonly referred to as a "demand-side platform" in ad-tech parlance, YAM Plus also allows media buyers to use Yahoo's first-party user data to target those ads.

Yahoo's display advertising business has been hit hard by the rise of automated ad-buying, among other reasons. This emerging buying method has made buying and targeting ads as easy as booking a hotel through Kayak and has meant that advertisers don't need to secure broadly targeted upfront commitments in order to reach their intended audience. Programmatically sold ads also tend to be cheaper than ones sold directly by a publisher's sales rep.

Seeing that they can get to Yahoo's audience without going through its sales reps, advertisers have pulled back their spending on Yahoo's premium ad inventory, like big banners on its home page. That's one of the reasons Yahoo's display revenue has experience seven straight quarters of year-over-year decline. YAM Plus was -- and still is -- supposed to help pull Yahoo out of its tailspin.

Yahoo had originally announced YAM Plus in January but hit some snags that delayed its roll-out. The delay contributed to Yahoo's display ad revenue loss in the second quarter, CEO Marissa Mayer said during the company's most recent earnings call. Within the last month or so, Yahoo has launched a version of YAM Plus, but media buyers had to work with a Yahoo sales rep to place buys using the tool.

In order to access YAM Plus, advertisers have to spend at least $10,000 per campaign processed through the tool, though the minimum requirement can be higher and varies by advertiser, the people said.

Yahoo is said to still be testing the self-serve tool internally but has media buyers' interests. Several agency execs described Yahoo Ad Manager Plus as compelling and said they would be interested in a self-serve version that they could control themselves. "Over time the world is heading to more self-serve platforms," said one agency exec.

Google, Facebook, Twitter, AOL, Microsoft, Pinterest and even Amazon offer self-serve ad-buying tools as a way to make it easier for advertisers to spend money on their sites and control their campaigns. Yahoo has a self-serve tool but hasn't included the more premium guaranteed placements and doesn't allow for use of Yahoo's first-party data for ad targeting.

The self-serve version of YAM Plus appears to fulfill a vision Ms. Mayer outlined during her first earnings call as Yahoo's CEO.

"I think it's also important for us to enable our advertisers if they have an idea for how to run a campaign, and they want to log onto a system in the middle of the night and file a campaign, I think we need to have a system that makes that really easy to do," Ms. Mayer said in October 2012, according to Seeking Alpha's transcript of the company's Q3 2012 earnings call. (Yahoo has pulled the earnings call audio and transcript from its investor relations site.)

Early access to inventory and the use of Yahoo's first-party data are the two main reasons agency execs cite for using YAM Plus, but Yahoo may add a third. The company has considered withholding some of its owned-and-operated inventory to only be available to YAM Plus advertisers, the people said. That's not unheard of. AOL reserves some of its own inventory exclusively for that portal's automated ad-buying tool, they added.

Yahoo's ad-buying tool cuts some of the costs associated with buying Yahoo's inventory. Advertisers using YAM Plus don't have to pay a so-called "supply-side fee" that's appended to deals run through its ad exchange. However Yahoo execs are said to have raised the possibility of adding a fee for using the self-serve tool.

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