Skip to main content

Two paths to targeted marketing - Google and Yahoo

Yahoo has been attempting to move toward what some advertisers regard as the ultimate manifestation of marketing: ads tailored to the individual. With the announcement of their SmartAds product, Yahoo is claiming that they can target narrower groups of individuals and target ads more directly to the characteristics of that group. By analyzing users past web behavior combined with what a user is currently doing, Yahoo says they can more accurately determine the kinds of ads that a particular group of users should see. Yahoo's new technology will then cobble together the appropriate pieces to present a complete banner ad tailored to that group.

Google has chosen to pursue a different path and has announced that they do not intend to pursue behavioral targeting. They have opted instead to refine their flagship technology around search ads. The enhancement they are currently testing includes the previous search terms as well as the current search terms to determine what ads to show to users. This approach requires no knowledge of the user's past behavior on the web and uses only the user's current session. The benefit of this new approach is based on the contention that a user will do several searches to research a subject area. By addressing ads to the "theme" the user is searching on it is anticipated that the ads will be more relevant for that user.

Google has been working hard to maintain a consumer-friendly posture. This approach to ad targeting is being touted as preserving user privacy and to a great extent, it does. Clearly, it does much more to maintain user privacy than the recently announced policy of setting cookies to expire. (The cookie announcement has been criticized in the blogosphere as not really accomplishing much.)

Why the two approaches to targeted marketing?

Each company is playing to its strengths. Google is undisputedly the dominant search engine. That has created a powerful revenue stream from search-related advertising. Continuously refining the technology behind search ads is a logical progression. Using the lessons learned in search advertising probably allows tuning of the AdSense process whereby ads are served based on the content of the pages where they are hosted.

Yahoo's strength is content; as opposed to Google, Yahoo has more traffic that comes for the content as opposed to search. Building a new strategy around configurable banner advertising makes more sense than trying to beat Google in search advertising. Because there is more variety of content around which to place ads, Yahoo can benefit from the new style of behavioral targeting as well as the old style of behavioral targeting where ads were placed on sites that expected traffic from users with specific interests (placing car ads on sites for car enthusiasts, for example). Meanwhile, the Panama technology for search advertising that Yahoo recently rolled out at least keeps them in the game though not on a par with Google.

With all these different methods of serving ads and all the visitors that they get, why can't Yahoo be more profitable?

With search ads, and by extension AdSense (both can be considered contextual advertising), Google just sticks to core functionality and grows market share and earnings.

Where would you put your money?

Disclosure: I have no positions in either Google or Yahoo

Comments

Popular posts from this blog

Brazil - in a bubble or on a roll?

A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation

Trade Radar gets another update

Some of our data sources changed again and it impacted our ability to load fundamental/financial data. In response, we are rolling out a new version of the software: 7.1.24 The data sourcing issues are fixed and some dead links in the Chart menu were removed. So whether you are a registered user or someone engaged in the free trial, head over to our update page and download the latest version. The update page is here:   https://tradingstockalerts.com/software/downloadpatch Contact us if you have questions or identify any new issues.

Interactive Ads - Google one-ups Yahoo again

Google's ( GOOG ) press release describing the expansion of a beta program for what are being called Gadget Ads has again shown that Google is unparalleled at melding technology and advertising to benefit its bottom line. Gadget Ads are mini-web pages or "widgets" that can be embedded within publisher pages. I have written in the past on Yahoo's ( YHOO ) Smart Ads and how, by more precisely targeting site users and adjusting ad content accordingly, they provide a much desired evolution of the banner or display ad format. Though Smart Ads and Gadget Ads are not really the same, I think it is fair to say that Google has seen the challenge of Smart Ads and has chosen to leapfrog Yahoo by rolling out its own update to the display ad format. The evolution of the Gadget Ad -- One of the trends on the Internet over the last year or so involves software developers creating "widgets" which can be hosted within web pages and blogs. Widgets can be pretty much anything