Yahoo's content recommendation box, which appears on both
desktop and mobile sites, looks like the content marketing packages
that companies like Outbrain and Taboola place on publishers' sites. Those
appear near a page's main article and link to other stories from
around the web that someone might be interested in reading. They
also usually include links that companies pay for in order to
promote their pages or brands. But Yahoo's box only shows the
publisher's own content plus a Yahoo native ad.
The native ad network would be one way for Yahoo to take
advantage of advertisers' interest in its so-called native Stream
Ads and offset the company's years-long display revenue declines.
Yahoo's Stream Ads have appeared within the content feeds on
Yahoo's owned-and-operated sites since they were introduced in
April 2013. Their placement and design -- which closely mirrors the
unpaid content for which people visit sites like Yahoo -- have made
them a hit among media buyers.
Stream Ads accounted for 40% of the display ads Yahoo ran in
the second quarter of this year, CFO Ken Goldman said during the
company's most recent earnings call.
While Stream Ads have helped to spur advertiser interest in
Yahoo's products, they have hurt revenue in dollar terms: Sales of
Yahoo's more lucrative premium ads have declined as advertisers opt
for the lower-priced native units. As a result, Yahoo's
second-quarter display revenue declined by 8% from a year earlier,
when it first rolled out Stream Ads. That quarter marked the
seventh consecutive period of year-over-year declines for Yahoo's
Yahoo executives have
pointed to the company's off-Yahoo display ad business as a way
to spur display revenue growth. During the company's first-quarter
earnings call, CEO Marissa Mayer said the company wants "to grow
our off-network business, which to date has been reasonably small
on the display side." And Mr. Goldman said that Yahoo plans to run
more on ads on non-Yahoo properties, though neither exec said
whether Stream Ads would be included in those plans.
Yahoo has already tried to use Stream Ads to help boost sales of
its mobile search ads. In February the company opened up a new
ad-buying marketplace, called Yahoo Gemini, that let advertisers
buy the company's mobile search and native ads through its
automated ad-buying tool Yahoo Ad Manager. Gemini happens to be
where Yahoo is getting the native ads for its content
Yahoo's ad-supported content recommendation tool isn't a
full-blown native ad network. It doesn't, for example, place its
Stream Ads within the article feeds on other publishers' sites. But
it could be a stepping stone.
Yahoo hasn't tried to hide its ambitions for a native ad
network. Last month the company agreed to acquire mobile ad network
and analytics firm Flurry, which runs ads within third-party
developers' mobile apps. At the time of the Flurry deal's announcement, Yahoo's
senior VP-advertising technology, Scott Burke, suggested that the
plans to use Flurry to open up a mobile ad network running
Yahoo's native ads in third-party apps.