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Summary:

Yahoo’s VP of Sales explained how the site’s new focus on customized news and content will eventually lead to more dollars from native advertising.

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Yahoo today announced a revised news feed that adapts to your taste, based on what you like and what you share. The concept is part of the company’s effort to have its content streams evolve from big verticals like “Sports” and “Finance” into more a bespoke offering — a so-called “fluid graph” consisting of customized news topics alongside social updates from Twitter, Facebook and so on.

It’s a nice idea but how does Yahoo plan to make money from all this? Recall that, under new CEO Marissa Mayer, the company has been on a media buying binge, laying out princely sums to acquire Tumblr and news app Summly. Meanwhile, though, Yahoo’s display advertising business, which is its bread-and-butter, is as anemic as ever.

According to the company’s VP of Sales, Patrick Albano, the advertising market has yet to catch up to the trends of personalized news and content — meaning that some of the same old ads will appear next to the sparkling new Yahoo pages.

Speaking on Thursday at the Native Advertising Summit in Atlanta, Albano acknowledged that the ads appearing on the updated News product are largely repurposed from other areas of Yahoo — search, display and so on. But he predicted that the ad industry will soon catch up and devote more resources to making custom ads.

“As the web becomes more relevant, our native ads will have to be even more relevant,” he said, adding that ad makers will have to put more emphasis on format as well as text and brand message.

Will all this result in a flurry of customized ads that revive Yahoo’s flagging display business? It’s too soon to say — “native advertising” achieved buzz word status months ago, but many people still aren’t sure how much is hope and how much is hype. (Though it’s worth noting that native ad progenitor, BuzzFeed, also unveiled a custom news stream for its app today).

Albano also said that Yahoo is working with Denny’s and dozens of other brands to develop ad options on Tumblr. He also pointed to Vine and Instagram ads by the likes of Lowes and LuluLemon to predict that “photo and video-based native ads are the next big thing.”

  1. As a longtime user of Yahoo, I have always liked the variety of sources and stories you get on the front page – a little like an old newspaper experience. My only complaint with the new adaptive content is that it is overwhelmingly customized so that I lose the variety of stories on the home page. I.e. in the Yahoo of yesterday, I read a lot of general interest and news stories on the home page, and then go into Yahoo finance, which is where I deep dive and share stories. Now my home page looks like yahoo finance with 95% finance and business stories, so I am not getting the general news for which I came. Love the concept, but need the ability to choose.

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  2. Jason Lehmbeck Monday, July 1, 2013

    Great to see the recognition from Yahoo on this. In some respects, it is hard to believe this is still a problem after 1000s of the best and brightest have spent 15+ years and billions of VC dollars in ad tech innovation. This is no doubt a hard problem to solve but some of the challenge comes from a lack of focus on the most important part of the marketing equation: generating an ad experience that deserves the consumer’s attention. Ad tech innovation has largely been focused on targeting and pricing. What marketers need now more than ever is technology and data to help them figure out how to generate ad experiences that are worthy of consumers’ time.

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  3. It’s not going to because EVERYONE hates the new format. All one has to do is look at the huge lists of complaints to see that Yahoo is flushing the company down the toilet.

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