Home Online Advertising What Yahoo/Google Contextual Ad Deal May Mean For Right Media

What Yahoo/Google Contextual Ad Deal May Mean For Right Media

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yahoo-rmxIs this the beginning of the end for Yahoo’s Right Media Exchange?

According to All Things D’s Peter Kafka and confirmed by a Yahoo blog post, Google’s AdSense ad network will be among the monetization solutions embedded within Yahoo’s owned and operated properties.

The global deal covers inventory on Yahoo’s owned and co-owned properties (think Yahoo News and Finance), and for the time being, it’s strictly contextual. There is no audience buying capability or monetization through the DoubleClick Ad Exchange, since Yahoo doesn’t have AdEx enabled on its side.

However, there could still be an impact on RMX, as the aging exchange faces greater external competition through the demand sources in the Google Display Network. As a result, RMX could see fewer overall impressions and lose marketplace clout.

In a more speculative vein, Yahoo could decide to “turn on” the DoubleClick Ad Exchange in a few months, once the contextual ad relationship has been up and running for a while. Both companies know that, for regulatory and anti-trust reasons, it would be difficult for them to do a huge deal. A more incremental approach to sales outsourcing – first contextual, then audience targeting – would be easier for the market and government to digest.

The Yahoo thinking may be that given a world where demand-side platform technology can bid across inventory sources, why not make Yahoo inventory biddable through Google, where the tech may be stronger let alone the aggregated demand?  Google’s demand-side platform DoubleClick Bid Manager (“Invite Media 2.0”) is the largest buyer in the exchange tech business today.

Such an outsourced approach would be consistent with Marissa’s early focus on content and products, at the expense of ad tech. The long term could be viewed as a way to hand ad tech off to someone who can do better. Put more simply: Yahoo may not want to invest any more money in RMX.

On the other hand, if this is about leveraging contextual, Google’s contextual wins out given the demand they own.  The deal makes sense even without all the above speculation.

From the Yahoo post:

“Today, we’re excited to announce that we recently signed a global, non-exclusive agreement with Google to display ads on various Yahoo! properties and certain co-branded sites using Google’s AdSense for Content and Google’s AdMob services.

By adding Google to our list of world-class contextual ads partners, we’ll be able to expand our network, which means we can serve users with ads that are even more meaningful.

For our users, there won’t be a noticeable difference in how or where ads appear. More options simply mean greater flexibility. We look forward to working with all of our contextual ads partners to ensure we’re delivering the right ad to the right user at the right time.”

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