Yahoo Amped About Apt Display Ad System

by Mark Walsh, Sep 25, 2008, 8:00 AM

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Yahoo on Wednesday formally launched its Apt system aimed at streamlining the fragmented process of planning and buying of Web display advertising.

In what Yahoo co-founder and CEO Jerry Yang called a "revolutionary" step for the advertising world, Apt (formerly Amp) promises a one-stop shop for publishers, advertisers, agencies and ad networks to more efficiently buy and sell ads.

For publishers, the system is intended to increase ad revenues through more precise targeting. For advertisers, it offers a standard dashboard to simplify ad buying across multiple publishers. Ad networks can benefit by connecting their sites to a wider array of advertisers.

"This is about spending less time managing digital advertising and more time driving business results," Yang said at a New York press conference given a showbiz sheen with an appearance by actor Jon Hamm, who plays ad executive Don Draper in "Mad Men," AMC's hit about the 1960s-era advertising business.

Yahoo President Sue Decker said Apt would transform an outdated process, in which it now "takes 30 operational steps from the time an ad is conceived to the time it runs on a publisher site and is optimized for their strategy."

Requests for proposals that often involve weeks of faxes back and forth and other time-consuming tasks can be handled far more quickly through the new Yahoo system--leaving more time for agencies and publishers to focus on building their businesses, she said.

The San Francisco Chronicle and The (San Jose) Mercury News are the first publishers to test Apt, with the rest of Yahoo's nearly 800 newspaper consortium partners to follow by year's end and into 2009. The system is expected to roll out to other publishers and advertisers, agencies and ad networks early next year.

William Dean Singleton, vice chairman and CEO of MediaNewsGroup, which includes the Mercury News, was on hand to provide an endorsement for Apt. "Judging from what we've seen so far, we're off to a great start," he said.

By using Apt to target consumers via geographic, demographic and behavioral factors, Singleton explained that the Mercury News was able to provide more relevant ads--and accordingly, charge more for them. "A big part of it is the ease of using [Apt], but a big part of it is also the yield we think we can get going forward," he said.

Apt, which can be used for selling both premium and remnant (or "non-guaranteed") advertising, can therefore help to turn what had been unsold inventory and bundle it into higher-quality buys, according to John Slade, vice president for product management at Yahoo. He referred to this process as "up-bundling."

Singleton also said that some ad-related chores were now taking less than half as long using Apt. Looking ahead, he expects the system to help MediaNewsGroup achieve its goal of generating half of its cash flow from online operations in five years--up from 22% today.

Yahoo's push behind the platform reflects a broader industry trend toward automated, self-service ad systems. The goal is to bring some of the efficiency of paid search advertising to the display side, which now accounts for only about 35% of sales.

MySpace on Wednesday, for instance, launched a new program called Self-Serve Ad Service to make it easier for anyone to promote their products or services on the social network. Earlier this week, AOL unveiled its own self-service ad initiative dubbed BidPlace, which allows advertisers to bid on display ad inventory across its Platform-A ad network.

Facebook late last year started its own self-serve ad system including targeting, and Google maintains its AdSense system for text and display advertising.

Ultimately, Yahoo plans for Apt to encompass search, video and other types of advertising as well as display. Following its scuttled merger with Microsoft, the struggling Web portal is counting on the new platform to help regain momentum in ad growth.

"Due to Yahoo's scale and leadership position in display advertising, it is Yahoo's position to lose," UBS Internet analyst Ben Schachter wrote Wednesday in a research note about Apt. "The problem is, given Yahoo's execution history, we are concerned that they could lose it. This will all come down to execution."

It also faces a challenge in the economic downturn that has reduced Web display ad dollars by 6% during the first half of 2008, partly from a steep drop in spending by financial services advertisers, according to Nielsen Online.

Meanwhile, Yahoo appears to be continuing its search for a merger partner other than Microsoft. The Financial Times reported that the Yahoo board agreed Tuesday to resume talks with AOL. Yahoo had begun serious negotiations with AOL this spring as it sought an alternative to Microsoft's takeover bid, but the talks foundered.

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