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Yahoo! Unveils! New! Banner! Ad! Engine!

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Score one for Yahoo! in the ongoing battle for online ad dollars. Yesterday, the beleaguered company unveiled a new banner ad platform that allows marketers to target web users according to their online behavior, a talent typically reserved for text-based ad engines.

The new platform, known as SmartAds, could give Yahoo! at least a temporary leg-up on DoubleClick, the ad serving company that Google recently agreed to purchase in a deal worth $3.1bn.

As Google awaits FTC approval for its DoubleClick deal, SmartAds is now being tested on Yahoo!'s network of websites and by two major airlines, The New York Times reports.

With SmartAds, marketers have the power to create and distribute targeted banner ads using data that Yahoo! collects about individual web surfers. If a user has recently searched Yahoo! for DVD players, for instance, he might see a graphical ad that includes sale prices for DVD players at a nearby retail store. Such contextual targeting has long been a part of the text-based ads that turn up when you search sites like Yahoo! and Google, but it's a step up for banner ads.

"Yahoo!'s SmartAds gives marketers what they want from online advertising: the ability to deliver customized marketing messages to consumers, and still engage very large audiences with their brand," said Todd Teresi, Yahoo!'s senior vice president of display marketplaces. "By enabling marketers to reach consumers on a more tailored basis and helping creative agencies support those customized campaigns, we can provide an even more engaging, relevant online experience to the more than 500 million users of Yahoo! branded products and services."

Kelly Cutler, CEO of the Chicago-based Marcel Media, an advisory firm that specialized in online marketing, believes the platform could "take online advertising to the next level. Behavior targeting is something our clients have been clamoring for," she says. Marcel has yet to use the service, but the firm is slated to start a beta test with a few customers in the near future. "It's hard to tell exactly how much targeting this will provide, but it's definitely going to be an improvement over what we currently have available to us in terms of banner ads."

Traditionally, graphical banner ads are a decent means of promoting a brand, but - next to text-based search ads - they're a step behind when it comes to click-throughs and sales. "With search engine text ads, we've been able to assume behavior targeting based on what consumers are searching for," says Culter. "But display advertising is more a broad reach kind of thing. That broad targeting has actually hurt display advertising and that's why search ads have gained so much market share recently."

Yahoo! continues to trial Google in the search advertising market, and in mid-June, under pressure from unhappy shareholders, CEO Terry Semel resigned his post, giving way to company co-founder Jerry Yang. With its latest announcement, the company has at least shown that's it's still up for the fight. The SmartAds platform will also be available for use on RightMedia, the ad network that Yahoo! recently agreed to purchase (this deal is also awaiting FTC approval). RightMedia competes directly with DoubleClick.

Update

With its AdSense network, Google allows marketers to serve banner ads on third-party web sites, and these ads can be targeted to individuals based on zip code. But they can't be customized or distributed based on user behavior. ®

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