PointRoll Warns Clients: Yahoo Pulling Rich Media Ads
Through PointRoll's "Included" program, Yahoo and about 30 other large Web publishers offer PointRoll's rich media ads to marketers at no extra cost when threshold CPM prices are met. The rich media fees are covered by publishers who gain a competitive advantage by not making advertisers pay a separate fee for rich media.
But Yahoo effectively pulled some rich media ads recently as a result of its shift back to a model requiring advertisers and agencies to pay for third-party rich media placements on Yahoo, according to the PointRoll memo.
"The stated Yahoo policy is to continue to pay for rich media fees on qualifying placements through May 31, 2007," states the Feb. 16 missive signed by PointRoll Senior Vice President for Sales Andy Ellenthal. "However, if you are planning a third-party rich media buy on Yahoo it is advised that you contact your Yahoo representative for clarity and cost expectations," he wrote.
In an interview on Monday, Ellenthal said Yahoo had informed PointRoll that it planned to leave the company's "Included" program by June, ending its policy of offering advertisers free PointRoll rich media ads on Yahoo. The Internet giant is now pushing its own in-house rich media solutions as a free add-on to advertisers following its acquisition of rich media company AdInterax last October.
Ellenthal said Yahoo should honor any agreements with advertisers to pick up the cost for qualifying PointRoll rich media units, at least until June. "What's concerning, though, is when I hear about a handful of large advertisers' [rich media] tags getting pulled down and replaced with standard ads," he said. "That begs the question of 'how many do I not know about?'" To that end, his memo regarding rich media campaigns on Yahoo went out to 5,000 advertisers and agencies on Friday.
Ellenthal declined to name any of the advertisers who had been affected. But he emphasized that Yahoo has created confusion among advertisers lately over what CPM thresholds are required for rich media ads to be offered free under PointRoll's Included program. He said the CPM floor had changed three or four times during the last year after being stable for the last couple of years. "It's not clear to anybody today what the floor really is," he said.
Ellenthal said that PointRoll had maintained a "constant dialogue" with Yahoo over the issue, but that its transition to a paid model for rich media was still bumpy. Very rarely has he seen rich media ads pulled by sites during his 10 years in the online ad business, noted Ellenthal. "That's a pretty drastic move," he said. Among other publishers in PointRoll's Included program are AOL, MSN, iVillage and MySpace.
Yahoo said it hadn't seen the message PointRoll sent to clients, and therefore would not comment on it.
The dominant player in rich media advertising, Gannett-owned PointRoll, says it accounts for 70% of the market. Its flagship product is an expandable unit, dubbed "FatBoy," but the company also offers a variety of rich media formats and ad tracking services.
For its part, Yahoo's move into rich media through its acquisition of AdInterax is part of a broader goal to wring more profit from its ad operations. Along with its 20% investment in online ad exchange Right Media and the launch of Panama, its upgraded search marketing platform, Yahoo aims to better compete with Google on the one hand and social networking upstarts such as MySpace and Facebook on the other.
Ellenthal said that losing business from Yahoo wouldn't severely impact the company's finances. "They [Yahoo] garner a large percentage of media dollars out there, but we've seen an uptick on AOL, MSN and MySpace recently," he said. "Yahoo is just one of many places where advertisers can place their media."