Yahoo Labs forms group to target advertising

Yahoo AdLabs will do research and crunch data to build better tools for advertisers

Yahoo Labs has formed a team to improve the targeting and effectiveness of online advertising, the company said Thursday.

Yahoo AdLabs aims to help advertisers get more out of their marketing dollars by combining research and data mining with watching how users interact with ads.

The group has been operating quietly within Yahoo Labs for about six months. It has a relatively small staff today but is looking to hire more "top talent," said Ken Mallon, the Yahoo vice president in charge of AdLabs. He declined to reveal the group's budget.

As an example of the work it does, Yahoo released the results of a study that shows the effectiveness of "hyperlocal" advertising, which is serving users ads for stores that are within two miles of where they live.

The study was conducted at an "unprecedented scale," involving 300 million Yahoo users, according to Prabhakar Raghavan, chief scientist and the head of Yahoo Labs. It revealed, among other things, that hyperlocal ads give a five-fold return on ad-spend when measured in sales at the local store.

"It's not just intuition, we can quantifiably measure these things," Raghavan said.

The company is running a pilot program to test the AdLabs services with several large advertisers, which it didn't name. As well as retail it is working with advertisers in the banking, auto and other industries, Mallon said.

It will publish some of the data, as it did Thursday, and will use it to develop new products for advertisers, he said. AdLabs is something of a customer facing organization, he said, that will draw on work done elsewhere in Yahoo Labs, as well as by its own scientists, and present it to advertisers.

Yahoo has scaled back its investments in search, since it now uses Microsoft Bing to power its results. So it makes sense for the company to increase its focus on advertising. Yahoo is strong in display ads -- its revenue from that sector rose 14 percent last quarter, to $635 million -- but it is weaker in the bigger market for search advertising, where Google dominates.

Yahoo has several ways of figuring out where users live to help conduct its research. It can use an IP address, data it gathers from mapping or geo-tagging services, or addresses people provide when they sign up for services. Yahoo already has 100 million "addressable users," Mallon said -- users for whom it has both a name and a street address.

If a user also provides their email address to a local store, to sign up for a loyalty program, for example, Yahoo can match the user to the purchase and figure out how many people who clicked on an online ad went to on to make a purchase at their local store. That's how it performed the hyperlocal study.

As with all services that track user behavior closely, Yahoo will have to be careful not to stir up privacy concerns. Raghavan said Yahoo employed an outside company to match the ad clicks with the purchase data, so Yahoo and the advertisers received aggregate data and not people's individual purchase history.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags internetadvertisingsearch enginesYahoo

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

James Niccolai

IDG News Service
Show Comments

Father’s Day Gift Guide

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?