Yahoo's New Ad Platform Lets Newspapers Sell Its Inventory

System Also Will Extend Portal's Reach, Provide It More User-Behavior Data

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NEW YORK (AdAge.com) -- As Yahoo faces increasing pressure from an unsolicited Microsoft takeover bid and a volatile stock market, it's turning to an old-media ally: newspapers. Despite the uncertainty over its future, Yahoo and its newspaper consortium are betting on a new ad platform the portal is set to announce today.
Susan Decker
Susan Decker Credit: Yahoo

The platform will be rolled out to the 600-plus papers in Yahoo's newspaper consortium in the third quarter and will replace the papers' current ad-serving technologies, allowing them to sell beyond their own audiences.

It was no secret Yahoo was launching a new ad platform. President Sue Decker talked about it at February's Interactive Advertising Bureau annual meeting, referring to it by its internal name, Apex. But last week, Yahoo execs demonstrated the system and took a deeper dive into what makes it interesting.

Two-way sales
Officially named AMP (that's an acronym for advertising-management platform but could work equally well to describe what Yahoo needs for its stock price), the system will operate like an automated ad network, with a twist that turns the traditional one-way selling model of an ad network on its head. It extends Yahoo's reach and allows it to collect more user-behavior information via the newspaper sites, but those newspapers can also sell inventory on Yahoo's network of owned and operated sites.

"If you're the Houston Chronicle, for example, historically you've sold that and other sites within your holding company," said Mike Walrath, senior VP-advertiser and publisher marketplace. "Today when they go to create a proposal for an advertiser, they can look across Houston Chronicle, their holding company, all the other holding companies [in the consortium] and on Yahoo as well. ... All inventory on Yahoo can be locally targeted."

Yahoo already has been manually testing the two-way network with 15 newspapers and will increase its pool of testers to 50 before the third-quarter launch of AMP. In those early tests, Yahoo executives said it boosted the scale a paper could offer advertisers by five to 10 times.

Salvation at hand?
Newspaper execs see value in Yahoo's system and are excited about the ad server's technology and analytics prowess. In a staff memo outlining the hard economic times ahead, Douglas Ray, publisher of the free, suburban Chicago Daily Herald, painted the venture as a sort of savior: "The Daily Herald's prominent position in the Yahoo newspaper consortium puts us on a fast track to new Daily Herald/Yahoo internet initiatives, an alliance which bodes well for the future," he wrote.

Of course, the Yahoo system, however promising it sounds, could be overshadowed soon should Microsoft get its way and acquire the company. It's unclear whether Microsoft would adopt Yahoo's ad technology, but most industry observers say that's unlikely, especially since Microsoft dropped $6 billion to acquire aQuantive, with its Atlas technology.

"I would imagine [Microsoft execs] would favor their own technology in eight out of 10 cases," said Greg Sterling of Sterling Market Intelligence. "Microsoft thinks Yahoo brings its brand and consumer volume, not technology. If I were a newspaper, I might be asking that question."

Spreading their bets
Mr. Sterling pointed out that Yahoo's not the only bet newspapers are making. "You have to have a diversified strategy," he said. "Yahoo's consortium is one source of inventory, QuadrantOne is another source. There's plenty of overlap."

QuadrantOne is a network created by several major newspaper chains, including Hearst Corp., Tribune Co., Gannett Co. and the New York Times Co. Members of Yahoo's consortium, such as McClatchy Co. and A.H. Belo Corp., also have joined. Newspapers also have joined with companies such as Centro to simplify online ad buying and Zillow to help sell real-estate inventory.
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