NEW YORK Yahoo! is introducing new technology that automates the creation of banner ads, allowing advertisers to run potentially thousands of permutations tailored to user behavior.
Called SmartAds, the rich media banners are created on the fly, combining Yahoo!'s trove of user behavior data with inventory feeds from advertisers. The result is executions based on what users have searched for on Yahoo! matched up with product listings from advertisers.
"The use of consumer insight, we believe, is the future of how great marketing is done," said Todd Teresi, svp of display marketplaces at Yahoo!.
For example, Yahoo! could detect a New York-based user who has recently searched for flights to San Francisco. Working with an airline's listing of fare deals from New York to San Francisco, a banner ad promoting a sale on that route would be generated from assets provided by the airline's agency. For agencies, Teresi said, this means not having to worry about creating thousands of different banner ads.
Teresi would not disclose advertisers using the technology during its testing phase, but said Yahoo! has begun with the travel industry and plans to move to retail and auto. The SmartAds placements are receiving two to three times higher click-through rates than regular placements, he said.
David Kenny, chairman of Digitas, said technology platforms like SmartAds hold the promise of bringing the hyper-targeting and effectiveness of search into the 95 percent of Internet pages that are not search results.
"It can be a very important piece, especially for retail, financial services and travel," he said. "For those clients, who spend a big chunk of their [online] budgets on search, it's a big deal."
Several Publicis Groupe agency clients plan to use SmartAds, though Kenny declined to identify them because they view it as a competitive advantage. Yahoo! is selling SmartAds to advertisers on both a performance and impression basis, Teresi said.
Yahoo constructed the SmartAds platform off the AdInterax rich media technology it bought eight months ago. It has already dabbled in automating the creative process in the past year by turning search listings into banner ads using stock photography. SmartAds will give advertisers more control, Teresi said, and will not sacrifice quality.
"Relevance to the consumer is all that matters at the end of the day, whether it's a piece of content or an ad," he said.
SmartAds will run across the Yahoo! network, as well as on affiliated sites in its ad network, such as eBay. Teresi said Yahoo! would run the placements on more site through the Right Media ad exchange, which Yahoo! inked a deal to buy two months ago. It will hopefully extend to video and mobile, he added.