There’s a great piece in the recent Business Week about an up and coming way to sell display ads. “Yahoo! Counting On Apex” describes how a search engine marketing-esque auction environment may save the beleaguered Yahoo! by increasing the amount of revenue they extract from their vast quantities of display ad inventory. If they can better monetize their vast network of content, they may not need to be purchased after all.

How display ad buying works today:

If you’re a search marketer you may’ve never purchased display ads. In today’s world, you generally purchase high-value placements directly from a site – i.e. you call up your Yahoo! rep and tell them you’re ready to plunk down a few hundred grand to be featured on the Yahoo!.com homepage on a given day; or you purchase display inventory across hundreds or thousands of smaller sites through an ad network such as AOL’s, AdBrite, TribalFusion or countless others. It works a lot like traditional media buying in that you are getting rates based on impressions, and pricing is generally set by the publisher or the ad network.

How it will work under Yahoo!’s Apex:

The Business Week piece about Yahoo!’s Apex begins to explain how Yahoo! intends to make its display advertising systems work more like its search marketing systems. By selling display on an auction basis, the market will be able to more quickly react to the effectiveness of their ads and increase their value.

Obviously this will work better with direct response (DR) display campaigns, particularly those measuring “view-through” conversions, but if advertisers have a clear understanding of how much of a given conversion should be attributed to display they can automate their display advertising – at least on Yahoo!’s network – in much the same way they automate their search advertising. They can bid placements up and down on a real-time basis and extract more value than they would with a traditional ad network or placement buy.

Kudos to Yahoo! for taking the lead in placing a “big bet,” as Jerry Yang put it, on display auctions. Let’s hope theirs and GoogleClick’s AdEx catches on as well.

What this means for your business:

If you’re reading this you’re probably pretty familiar with the auction environments found on just about every search engine you’re advertising on. You may even be using a search marketing management tool such as Omniture SearchCenter to automate your bid management so you don’t have to watch bids on an hourly or daily basis.

Over time, as buying display in this way catches on with advertisers and agencies – as it already has with search engine marketing – technology will catch up and help this process along. Wouldn’t you like to spend more time planning and less time trafficking ads and pulling reports? No doubt.

The search marketers of today – who understand exactly how bid markets work – will be well positioned to be the display buyers of tomorrow. And if Google has its way and successfully introduces auction buying to radio, newspapers, television and any other form of advertising, the search marketers of today just might be running the media buying agencies of tomorrow.

Ron Hassay
Ron Hassay

This is great to hear! This definitely creates an opportunity for those advertisers who are skeptical of display due to the higher costs and lest accountability. Does SiteCatalyst have the ability to measure the "view-through" conversion?