Yahoo Promotes AdLabs, Touts Hyper-Local Targeting
- by Gavin O'Malley @mp_gavin, February 3, 2011
Yahoo on Thursday debuted a new "lab" dedicated to the future of digital advertising. AdLabs is designed to complement Yahoo Labs, which was founded with a similar mission back in 2005.
"Yahoo Labs has been instrumental in developing Yahoo's advertising products," said Dr. Prabhakar Raghavan, Yahoo's chief scientist and head of Yahoo Labs. "AdLabs will ... break new ground in combining scientific rigor with a deep understanding of the practical needs of marketers."
To date, Yahoo Labs has produced studies on online advertising, and claims to have created the new scientific discipline of "Computational Advertising" and offered various insights into consumer behavior and ad metrics.
New research from Yahoo's lab indicates that hyper-local targeting of retail display campaigns generates more than five times return-on-ad-spend, measured by sales lift at the retailer. Overall, 75% of the total return in this phase of a new study was generated by in-store purchases.
Customers who live within two miles of one of the retailer's stores represented 10.6% of the audience that sees the ads, but generated 56% of the revenue. Return-on-ad-spend was four times the spend for customers living within five miles of a store, and 21 times the spend for customers living within two miles of a store.
Measuring the extent to which friends' behaviors predict your own, the study also found that in several consumer domains, the effect is substantial, complementing traditional demographic and behavioral predictors.
The new study examined the impact of frequency, or number of times someone is exposed to an ad, on user engagement. Contrary to conventional wisdom, the experiment -- conducted on the Yahoo home page -- found that individuals are just as likely to click on the twentieth impression as they would the first impression.
No wonder Yahoo is going down in flames.
Distance to store is a well known factor in driving sales - gravitational effect.
Holy cow! how old is Dr. Prabhakar Raghavan? 12?
I did this type of analysis for major retailers in the seventies, in the last century.
I was not impressed with Yahoo's behavioral scientists when they worked with us at Copacast ad targeting network. It was clear they have no street smart experience in retailing, let alone advertising.
What a shame, it was once a great place to work and now is the runner up behind MySpace of pioneers in business who fail due to bad management.
Has anyone else noticed that this type of reasoning, which is often based on statistical significance, or other "data" is highly prevalent in SEO and also in marketing.
Take for example the criticism above, which also suggests that Yahoo is going down in flames, based in part on the limited information in the article.
While I was also initially not impressed, there was also not enough info included in the article to my liking.
I am leaning towards the possibility that this Adlabs story is merely the product of Yahoos attempt at marketing to "data driven" advertisers that might buy hyper local display. Who is selling who? The problem with science in marketing is exactly that. Its true you can count everything, and not everything that can be counted counts. And today the problem is compounded not only by bad data, but also by bad analysis.
Case in point, check out this article in The New Yorker:
http://www.newyorker.com/reporting/2010/12/13/101213fa_fact_lehrer
At the end of the day, someone said it best, that there are lies, then damned lies, and then statistics.
However, to Andres points which appear to come from being very close to this industry, it does appear that both Yahoo and Myspace are failing terribly. It is a shame.
http://seo-cubed.com
I did not want to be viewed as being harsh on Yahoo as we should have respect for pioneers in the web commerce space.
That be said, I suspect that Yahoo had a lot of smart brains and PHds that were managed by 22 year old journalism or IT graduates with no business experience.
That's the difference between Google and Yahoo; the former were wise to bring in seasoned execs to balance unseasoned but smart tekkies...the rest is history and I rest my case...