Yahoo launches in-stream native ad offering, gives selected brands the keys to its homepage

  • Digital advertising
  • July 2, 2015
  • Damien Venuto
Yahoo launches in-stream native ad offering, gives selected brands the keys to its homepage

Self-service is common in supermarkets, petrol stations and at buffet restaurants, but not so much when it comes to producing content marketing pieces for publishing on a major website. And yet, this is exactly what Yahoo has been facilitating to certain selected clients over the last few months through the beta version of its new native ad in-feed platform that will soon be made available to the wider market.

Ben Green, the director of programmatic, audience and native at the tech company, says that interface allows clients to upload content directly to the Yahoo family of sites in real time.      

"It’s a really simple product," Green says. "All you need are simple creative assets, simple copy, a piece of copy for the headline and two static images. Those assets will work on every single Yahoo property and blend in organically into the content around it, despite what the environment is and despite what the device is. And that really makes it very simple for clients."

Native advertising is usually understood as a more laborious process that involves extended sign-off process, in which the editorial (or native advertising) team at a publisher has to work with the client to develop content that both deem suitable. This process, which often extends over numerous emails and frustrates the parties on both sides, has been critcised for being too slow, and Green believes that Yahoo's new offering solves this problem.      

“Typically, when traditional publishers, like APN or Fairfax, are talking about native advertising, they’re talking about a bespoke piece of editorial-style content housed within they’re specific environment … There tends to a lot of to and fro between editors and clients to produce a piece of content, without necessarily any guarantee of an audience ... but that’s just one of the six different categories in the IAB Native Advertising Playbook."

Green says that Yahoo still offers the more traditional approach, but the new option will serve to expedite the process for clients who want something that's faster.

“We see native advertising as the most effective way of amplifying content, and I think that’s really important because 92 percent of marketers across Australia and New Zealand employ content marketing strategies and over 87 percent of them are planning to increase their investment [in this space].”

This is particularly important because advertisers are increasingly shying away from banner ads in favour of other online advertising options. This shift was seen in the IABNZ digital ad spend figures, which showed spend in display advertising dropping from $131 million in 2013 to $128 million in 2014.  At the time, IABNZ chief executive Adrian Pickstock told StopPress that this showed that New Zealand was still some way behind the industry in the United Kingdom, where the evolution in the display advertising model has seen brands willing to spend in the segment.    

"Display advertising is the fastest growing category in the UK’s digital sector," said Pickstock. "This is fuelled by increases in native and video spend, which together form 42 percent of the display spend."

By launching its native ad platform, Yahoo is essentially offering its clients an alternative to banner ads, which have thus far driven very low response rates.

"We’ve seen it up to 400 percent more efficient than traditional display,” says Green.

While this does sound impressive, it's worth noting that traditional display advertising isn't known for its effectiveness and it is coming off a very small base.  

iProspect general manager Alex Radford was one of the launch partners that Yahoo started working with when it first introduced the beta launch for the native ad platform, and he says that the new product is proving effective thus far.  

"In an industry where a success in banner advertising, for example, can be defined by a click-through rate of 0.1 percent, we’ve been seeing really strong results from the Yahoo products. On a cost-per-click basis, we’ve even been getting performance that’s much stronger than what we’d even see in search."

In addition to delivering click-through rates of 0.4 percent, Radford says that the native advertising offering on Yahoo is also advantageous because its affordablity.

"Over the last year or so, search has become more and more expensive. Budgets have been locked in over long periods of time, and advertisers are looking for new areas to drive performance, and I think that’s especially where Yahoo’s native product has been very successful."

As online advertising has become more popular, the demand has increased and this has led steadily increasing price levels. And at this stage, the Yahoo offering provides a level of effectiveness that would be more expensive—or labour intensive—to acquire through other online ad formats.

And Green also says that it comes with benefit of flexibility: 

"It allows advertisers to jump in and change creative in real time. I started my career in direct marketing, and before we ever sent out a direct mail piece to a database of a million prospective customers, we might have 25 different variations of that creative. And we were looking for the specific creative that would have the best response rate before we sent it out to the database. A lot of those principles of A/B testing have been lost in the digital display arena because of the high cost of production, whereas with the Yahoo native platform a performance analyst can jump into the platform, create 25 different executions in 25 minutes and then the algorithm in the platform will determine which is the best performing. I think that this is really the evolution of advertising." 

It isn't that unusual for advertisers to upload their ads independently. Even here at StopPress, advertisers are able to post new jobs in our Jobbies section. But Yahoo's decision to give advertisers so much control over the platform also carries an element of risk to aesthetics of the site, because it allows brands to post on the homepage. And advertisers could, in theory, publish ads that feature inappropriate material. So, to ensure that this doesn't happen, Yahoo has incorporated some interesting tools to ensure that unsavoury ads don't make it into the screens Yahoo users.      

"We have technology that can look at images and check for things like the amount of skin that might be in a particular image that has been uploaded," says Green. "And if there’s anything suggestive that’s been picked up by the technology, it’s automatically put on hold. A human then has to review and approve it before it’s put online."

Additionally, Yahoo also prohibits advertising in certain categories.

"There are some categories that have been completely banned," says Green. "Unlike Google search, for example, we don’t allow advertising across sensitive categories like adult content. At the moment, we don’t even allow things like gambling."

Regardless of these steps, Yahoo's in-stream native ad product still carries the possibility of interfering with the overall look of the Yahoo homepage. When the self-service, native ad offering was released in the US market, low-rent advertisers, peddling credit cards, loans and mortgages inundated the Yahoo homepage, leading to criticism from various international publications (Advertising Age even referred to the in-stream offering as the low-hanging fruit version of native advertising). 

However, Yahoo seems to have learnt from this mishap, and will not be giving any advertiser a key to its homepage. 

"When the US launched it, they went fully self-service from day one," explains Green. "So anyone with a credit card could log in. It was a very early and young product. As a result of the rising cost of search, the Yahoo native product was really attractive to advertisers because of the attractive cost per clicks ... And they did receive some early criticism of the platform. Launching the platform across Australia and New Zealand, we took a very different approach, and we’ve only just in the last couple of months made self-service available to certain key clients, but we haven’t opened up the floodgates to anyone with a credit card and a $300 budget."            

Thus far, this approach has worked during the beta phase. Since it was made available to clients such as iProspect, Yahoo has been running an average of 120 campaigns per month for 100 different advertisers. And Green adds that the company is already working with many of the local blue-chip brands.

Yahoo has not yet announced an official launch date, but it will soon be extending the service to its broader client base. And it will be interesting to see which advertisers are given the freedom to post adds independently and how they use this power.      

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