Is Yahoo! Giving Google an Early Christmas Gift


 

Yahoo!’s announcement that advertiser clients using DSPs and ad networks would be required to get their own ‘seats’ on RMX didn’t really come as a great surprise.  Several weeks ago they announced that they were shutting down retargeters such as TellApart, Criteo and Dotomi from their Class 2 inventory. It is no surprise that Yahoo! is looking to take more control of its inventory as Class 1 is getting hammered with the growth of audience targeting and social media impressions putting major downwards pressure on CPMs. At the same time, RTB exchange buyers have had a banner year, with double-digit growth and showing no signs of slowing down in 2012. And it goes without saying that this move is designed to increase Yahoo’s revenue.  But at the end of the day, will it have the desired effect? Does more control equal more revenue, or will this money find its way instead into the waiting arms of Google?

As a marketer trying to make sense of this move, what does this mean for you?

  • Yahoo! Class 2 Still Available via RMX: You may have to go through the process of getting your own seat, but if this inventory is important to you – nothing has changed minus the chore of getting through a process and a bit of extra paperwork.  Be prepared to shoulder the additional costs of owning your own seat, including buying fees and covering the costs of buyer/seller discrepancies.

  • No Shortage of High Quality Exchange-Traded Inventory: Digital marketing management (DMM) providers with comprehensive DSP capabilities like DataXu have access to hundreds of billions of impressions per month across premium, remnant, bidded or guaranteed inventory, including more than enough impressions on so-called “premium” publishers in the comScore 250. Provided that the platform with which you’re working has a good diversity of supply, and access to more than just Google and RMX, you likely won’t see any meaningful difference in how your campaigns perform and distribute.  At DataXu, we connect to over 20 exchange aggregators to protect buyers from any market manipulation.
  • Technology Platforms that Add Value: This type of change will separate those players with real technology platforms from those relying on media traders and spreadsheets.  Automated, algorithmic buying systems like DataXu can reroute spend and reliably pace buys without affecting ROI.  Rules based manual approaches will suffer.

  • Be Mindful of the Company You Keep: If you work with ad networks or ad network players masquerading as DSPs, this change may reveal more than you expected.  In contrast, if you work with a technology provider like DataXu who is solely aligned with the needs of the buyer, allows transparency and works across all media buys, this announcement will have little or no effect.

Ultimately there’s no reason for alarm, as the revolution in digital marketing will continue unabated.  Automated technologies like DSPs, DMPs and DMM platforms have already dramatically improved advertising ROI, thereby irrevocably changing the landscape of digital media buying.  The days of slick media salespeople wining and dining their way to billions of dollars in revenue on overpriced media are as antiquated as the methods of Mad Men’s Don Draper.  Technology platforms and programmatic buying have indelibly changed the game.

Yahoo! asking Right Media buyers to be transparent to their advertisers, and justify the value they are capturing is a very good thing for the industry.  At the same time, is making this move with fewer than 7 business days’ notice, without differentiating between players that are actually bringing a valuable new piece of the stack to the party and others who are simply arbitraging Yahoo! media, the best approach for all parties involved?

NOTE: Yahoo! has extended the deadline for procuring a seat on RMX to January 11, 2012.