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Yahoo Rolls Out Its Own 'Native' Ad Format

A New Ad Strategy for the Yahoo Homepage

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Yahoo reorganized its homepage in February around an infinite "stream" of content, personalized for the user by their declared or implied interests. Now that feed is getting ads, so-called "native" formats called "Yahoo Stream Ads" that will appear in the feed, whether on the desktop, tablets or mobile phones.

"Both the placement of the ad and the look and feel will be are native to the content," said Yahoo VP of product, Mike Kerns. And just as content is targeted in that feed, the ads will be, too. "The targeting will be primarily based on your user profile," he said, but Yahoo can also target those not logged into their Yahoo account through their behavior on the site. "We have improved that algorithm substantially," he said.

The definition of what constitutes a "native" ad is a moving target. Publishers from Buzzfeed to The Atlantic have seized on the notion, which means ads that mirror the tone or type of content in some way. Mr. Kerns said the ad will be clearly marked as such, so not trying to look like a news story or video, but it will be in the format that predominates in a user feed. Yahoo users watching videos, for example, might get a video ad. Those reading text will get a text ad, targeted to their interests.

Yahoo CEO Marissa Mayer, who once led user experience for Google search, likened the new ad to search results where relevant ads are displayed with content. "Like with web search, users appreciate complementary, unobtrusive advertising, and we're committed to delivering just that," she said, in a blog post. "Advertising can, and should, enhance content discovery in a seamless and effective manner."

The new format will be introduced tonight as part of Yahoo's "NewFront" presentation for advertisers and agencies in New York, along with a slate of new programming.

In addition to its in-stream format, Yahoo is renovating a staple of its ad business by bringing the bigger, IAB-standard "Billboard" ad to its homepage. The Yahoo Billboard will reach everyone who visits the Yahoo.com homepage that day, and represents the big, broad reach the portal can still achieve. Yahoo Sites had 186 million visitors in February, according to comScore, or 84% of the U.S. internet population.

The ad is similar to YouTube's homepage ad, and like YouTube, advertisers can customize with creative that expands with rich media.

The new ads come amid declining ad revenue for Yahoo. Yahoo display ad revenue declined 11% to $455 million in the first quarter of 2013.

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