Yahoo Reboots Ad Business in Attempt to Own Ad Tech

Mayer 's CES keynote unveils unified ad suite, Web buying platform

It’s getting harder to accuse Yahoo CEO Marissa Mayer of not caring much for the ad business.

In fact, Yahoo wants to place itself at the center of the online ad ecosystem—the same monster ambition held by Google, AOL and half a dozen other digital titans.

During a keynote at the Consumer Electronics Show, Mayer announced a slew of big changes to Yahoo’s ad business, including the launch of a new unifying brand—Yahoo Advertising—as well as a buying platform—Yahoo Ad Manager—which aims to serve as a central suite of tools for online advertisers to manage all of their buys, not just those that include Yahoo inventory.

In other words, much like AOL’s message at its recent Programmatic Upfront, Yahoo is saying to the ad world: Online advertising is too complicated. Programmatic is growing rapidly, but there are too many middlemen. Let us handle everything.

“In the big picture, Yahoo Advertising is about a unified ad suite,” Scott Burke, Yahoo’s svp of ad tech told Adweek. “The market is so incredibly fragmented. It’s high time to start simplifying that … including our ad offerings. The idea is unified marketing across different channels. Today that is so challenging, but it’s exactly the vision. We want to scale up our programmatic products. And this is not an owned-and-operated, Yahoo-only solution.”

Indeed, buyers will be able to automatically execute buys across Yahoo’s various channels, including the Web, video, mobile, even Tumblr—all in a central interface called Yahoo Ad Manager. They’ll be able to execute buys on Yahoo using their own data. They’ll be able to buy banners and native ads and some premium inventory.

And they’ll be able to do this across the Web on non-Yahoo properties through Yahoo Audience Ads, a product that essentially replaces Yahoo Genome. Advertisers can use Yahoo data to build segments to target on Yahoo and across the Web. “This really allows us to be more in the cockpit,” said Burke. “There is nobody out there with all these ad products. Everybody on the agency side is trying to do cross-channel buys. But even search is a point solution at Google. Nobody has the same breadth of channels that we have.”

Speaking of channels, like Google, Yahoo maintains its own exchange, Right Media. Despite many rumors of its demise, Right Media isn’t dying but rather going through a total rebirth starting with a new name, Yahoo Ad Exchange.

The new exchange was built on top of Right Media’s technology (so much for the theory that Mayer was in the market for a major ad tech acquisition). “But we’re changing the model of how the exchange works,” said Burke, who acknowledged that Right Media’s inventory reputation had taken a big hit over the years. “We are moving away from the network of networks model,” Burke said. “As this rolls out, you’ll see improved network quality, better liquidity, more transparency. We've really raised the bar for supply quality. And you will no longer have multiple accounts and tools. And all accounts have a single director.”

On that note, Burke emphasized that while Yahoo is embracing the efficiencies afforded by programmatic technology and the desires of some advertisers to use self-serve tools as much as as possible, Yahoo's sales guys aren't going away. And some premium inventory, like the homepages for Yahoo’s top channels, as well as anything custom, will remain available only through direct sales.

Meanwhile, Burke also acknowledged that Yahoo is still working its way through how it sells native advertising, like its Stream Ads, which have come under criticism for featuring mostly direct response brands. Going forward, the plan is to cater to more brand advertisers with image-based native ads and better evaluation metrics. Burke sees a "sea change" coming in the way buyers optimize brand-oriented online ad efforts.

As for Yahoo’s broader ambitions, the company is attempting to wear two big hats in the online ad world: that of a competitive media brand selling ad space against everybody else, as well as a neutral party serving all media companies and advertisers. What makes Burke think agencies and advertisers will embrace this, even as other companies have made similar attempts? (Remember Yahoo AMP?)

“What gives us some reassurance is that as the display market has evolved, everybody is in agreement that we need consolidation and simplification,” he said. “Ad buyers don’t want to be systems integrators. It is the right time. We’re not trying to compete head-on with all the tech vendors, but we felt like we had to lift our game.”