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.