Blog Post

Yahoo’s Pitch To Small Businesses: Self-Serve Display Ads

There’s been some surprising good news about display-ad spending this past month — and Yahoo (NSDQ: YHOO) is betting that more is on the way. AdAge’s Michael Learmonth has the details about Yahoo’s latest bid to turn its display business around. On Monday, the company will release My Display Ads, a self-serve ad system that it will use to court small and mid-size businesses. The introduction of this product suggests that Yahoo feels ready to go head-to-head with Google (NSDQ: GOOG) and AOL (NYSE: TWX), as well as social networks Facebook and MySpace, which have had been aiming self-serve ads at smaller advertisers for several months. More after the jump

Yahoo’s latest display gambit comes as more advertisers, local and national, have increased their search-ad spend. But the pull of search appears to be waning among local busineses, according to a recent report by local ad analyst Borrell Associates. Even though other sites (like Yelp) have had their hooks in small marketers, there appears to be room for Yahoo to capture some of that business, which AdAge’s Learmonth says is a $13.6 billion market. Yahoo is offering the My Display Ads to marketers on both the CPM format or as a cost-per-click auction through the companies’ various other platforms, including its Right Media ad exchange system.

2 Responses to “Yahoo’s Pitch To Small Businesses: Self-Serve Display Ads”

  1. Div Bhansali

    It's interesting to compare Yahoo's new offering with the most similar self-service display product already out there, AOL's BidPlace SB (full disclosure: I work for this product). Both Yahoo and BidPlace SB allow advertisers to reach the majority of US Web visitors (SB's reach is higher, at 91%). Both offer advanced targeting options and, within the next couple of weeks, both will offer the ability to build banners on-site. (BidPlace SB will offer both templates and the ability to build banners from scratch.)

    However, the similarities end when it comes to pricing. Here are the recommended CPC bids for the same targeting on both products:

    Run of Network, Geo = Florida
    Yahoo: $1.30
    BidPlace SB: $0.74

    Auto Content Channel
    Yahoo: $4.93
    BidPlace SB: $2.45

    I'm curious how Yahoo can justify charging 75-100% more than BidPlace SB for the same types of inventory and targeting? Especially when BidPlace SB has a lower budget minimum ($10 / day) and offers a full budget guarantee to protect advertisers from over-billing for excess delivery, while Yahoo does not.