Yahoo Ready To Fix Advertising: What Will it Take?

Ramesy McGrory

Ramsey McGrory, Yahoo's vice president of North American Marketplaces and newly appointed head of Right Media, says fixing advertising requires the industry to focus on the "simple stuff." That means spending time on figuring out the standards for content classification, ad verification and data use. It's critical that the industry also addresses standards issues for order processing.

Bringing standards into digital advertising will bring down the cost of executing campaigns. Citing industry stats, McGrory says on average, digital campaigns cost about 25% to 30% to run, compared with 2% to 4% for TV. "We can't sustain that when the relative cost is much more, compared with other mediums," he says. "We also need better understanding at federal and state levels, as well as finding the appropriate use of data to give consumers what they expect."

They may not be the sexiest things, but they are the most important in the industry to address, McGrory says. Especially if agencies want to convince the largest brands that spend the majority of their dollars in television to have a reason to invest more in online campaigns.

The need for standards signals a maturing online advertising industry, although the industry remains in its infancy as it tries to support growth. There are disparate systems, aging technology platforms, ad-serving units and emerging ad video networks. "The industry feels somewhat like a gangly teenager in that you know all the capabilities are there," he says. "Someday that gangly teenager will grow into something bigger, but there are still things we must work out."

That maturing industry has left some companies admitting the need to update equipment. Yahoo Chief Executive Officer Carol Bartz recently spoke to analysts, pointing to the search engine's aging technology as a contributing factor to the company's declining performance. Similarly, Jay Herratti -- chief executive officer at CityGrid Media, formally Citysearch -- spent the last couple of years working to upgrade ad servers and platforms. Some might argue that many companies updated their infrastructure 10 years ago to deal with Y2K issues, but the technology has come a long way in the last decade.

Continued changes in digital will see traditional fixes move over to support customers, discover how to reach them, and determine the impact. The industry must take it back to core processes and implement them in digital, such as how to generate interest, intent and action.

While the discussion on how to fix advertising began during a panel at Internet Week, "much of the foundation to support processes will set in within the next three to four years," McGrory says. "It's already happening. Setting the foundations will reveal that the large digital companies and large industry organizations such as the IAB and 4As have a growing influence."

 

1 comment about "Yahoo Ready To Fix Advertising: What Will it Take?".
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  1. Kirby Winfield from Dwellable, June 11, 2010 at 3:41 p.m.

    Wanted to send a shout out to the folks at Dapper for hosting the panel that inspired this article. They have done a great job pulling together industry leaders to discuss the major opportunities and threats in digital media today.

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