Tumblr to become Yahoo’s native ad server

17/02/2014

Yahoo will start to use Tumblr as a native ads server, with the popular blogging platform hosting sponsored content from brands, according to a news report.

In an interview with Ad Age, Ned Brody, Head of the Americas at Yahoo, said that Yahoo is working on a new way of delivering sponsored content using the Tumblr platform that they bought almost a year ago.

Yahoo's new native ads are similar to the already successful (sponsored content deals that others like BuzzFeed, Quartz and The New York Times.

An advertiser creates, or pays Yahoo to create, an article that is distributed on Yahoo properties.

Brody was unable to share examples and said the program is only in the testing phase. "We didn't mete out this product until CES," he said. We talked to Mr. Brody about the state of Yahoo, which he joined in September from AOL.

However, in an existing example on Yahoo’s new food network, sponsored content from Knorr appears in a box (rather than on the traditional ad banner positions at the right hand side or at the top) along with the other content.

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When clicked, the box expands into more content, with no sidebar or banner ads because the sponsored content posts are the ads. The ads are clearly defined with both the word Promoted and the AdChoices icon.

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In the interview with Ad Age, Brody said: “We now have 800 million users. We went up from 150 million mobile users at the end of 2012 to 400 million mobile users now. There’s a 14% increase in time spent on home page. The turnaround has really begun to take steam in the product side.”

Commenting on Yahoo’s decline in display numbers, Brody said: “No one ever said that that display number you’re looking at is the way for revenue to grow. Revenue is a portfolio of lots of different products: Stream Ads, programmatic ads, search, mobile. And with any portfolio, you have businesses that are continuing to grow and you have things that actually don’t grow as quickly. Look at the market in general. The core display businesses of the market are actually declining, while things like native and programmatic are growing.”

Mobile shift to 'stream ads'

The move follows Yahoo’s recent switch in mobile from banners to native ads on smartphones and tablets, as the portal looks to boost its mobile ad revenue through more engaging campaigns.
Yahoo said it will now concentrate on selling ‘Stream ads’, the companies version of native ad placements (often referred to as sponsored content).

“Most consumption now is coming in the forms of streams like Yahoo’s mobile app,” said Leo Polanowski, Yahoo’s head of client services for the Americas. “So it’s not a leap to say, ‘Hey, we want to provide the ads in the form because you get increased click-through rates and conversions.’”
By the end of this year, Polanowski said, Yahoo will likely completely switch to non-banner formats for its mobile ads.

The effectiveness of banner ads has long been questioned by the industry, with many recent reports finding that consumers find mobile ads more interruptive than TV ads and that mobile banner clicks are mostly due to mistaken clicks on a small screen, rather than as opposed to purchase intent.

Read the Ad Age report here

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