Yahoo’s New In-Stream Ads Are Dominated by Direct-Response Marketing

Brands Like LowerMyBills Quickly Flocking to Native

When Yahoo introduced native advertising in April, CEO Marissa Mayer boasted that its new in-stream ads would be “every bit as personalized and engaging” as the editorial content around them.

But recently, the company’s in-stream ads have been dominated by direct-response marketing rather than premium brands that native was designed for. Two recent stream-ad headlines include: “I Just Got My Free Toilet Paper in the Mail!” and “Top-10 Credit Cards for Excellent Credit.” The ubiquitous direct marketers like have seemingly pivoted from banners to in-stream ads, and that has some in the industry concerned.

Dan Greenberg, CEO of native ad tech company Sharethrough, said that of the sites offering in-feed ads, Yahoo leans more heavily on direct response than, say, BuzzFeed and Facebook. Native ads must provide value to users, he said, and DR ads may not achieve that in the long run.

Eric Johnson, founder and president of the Los Angeles-based agency Ignited, said he believes more established brands will ultimately make a bigger splash in native. And to be fair, brands like Netflix and Virgin Atlantic have made appearances in Yahoo's stream. But those ads, too, tend to be focused on getting users to sign up. A Hyundai ad recently linked to a sponsored section of editorial content on college football.

Johnson added that Yahoo may be treading into "dangerous territory" with in-stream ads that closely—potentially too closely—resemble editorial content. "I understand why you do it, because right now there's novelty about it," he said. "We've probably got a year of novelty. But at some point, consumers are smart, and they get clued in. Their behavior will adjust to these units when they realize it's just a come on."

Yahoo said in a statement that it’s “still early days” for the ad format, adding, “We are focused on adding further targeting capabilities and have opened up opportunities to new advertisers that will continue to make Yahoo Stream Ads even richer as part of the content experience.”

Still, marketers appear interested. Craig Atkinson, chief digital officer and COO of Omnicom Media Group’s PHD, said at least 20 Omnicom clients have bought them.

Yahoo added in it statement that the company is "uniquely positioned as a partner that can help marketers integrate native, display, search, video and other formats across screens.”