SCOTT BURKE: I think the key story here is launching Yahoo Advertising as the primary investment for all of our ad technology. That helps tie together all the different products Yahoo has and really simplifies all the capabilities we have. It also ties together all the first- and third-party data on Yahoo's inventory and as well as using them programmatically to buy on the network.
In a large way, it's a synthesis of all our tools, not simply a rebranding. We're building on top of the capabilities of Genome and Right Media and completing the acquisition of interclick.
How has programmatic become more a part of the day-to-day function of Yahoo's ad strategy?
SB: Programmatic is growing in a number of senses. If we just talk about the idea of automation, apart from real-time bidding, we're trying to take out the friction of the standard media buying model. That could range from self-serve capabilities we now have with Yahoo Ad Manager Plus, which enables large marketers to just log in and manage their campaigns and audience ads.
We also have Yahoo Premium Ads. If you've agreed to a rate card with Yahoo, you can buy and book your own campaigns directly.
On the flip side of the automation part of programmatic, with our RTB offerings, what we're now doing is much larger scale. The RTB buys are being integrated into the Yahoo Audience Ads and the Yahoo Ad Exchange. We're going to work with advertisers who come in with audience segments to do RTB buying across a wider swath of buying sources than we've ever had available before.
Has the idea of "Programmatic Guaranteed" become more meaningful to Yahoo? Or do you still see direct sales and reserved inventory as separate from placements that are put on the exchange?
DENNIS BUCHHEIM: The demand for programmatic premium has increased substantially, even just in the last quarter. Not only are we integrating programmatic guaranteed into our Ad Manager, we've also started take a more open approach in terms of who can access that inventory.
If there are demand-side platforms buying RTB, they can also buy our guaranteed inventory alongside that.
SB: There's a total consolidation around what we think of as a single workflow for all these ad buys. There's no reason that we should have different tools for ad ops resources that are operating on behalf of an agency or on behalf of a premium publisher – or on behalf of Yahoo's owned and operated inventory. We're all trying to solve the same problem. One of the big issues facing display today is that after having evolved all these years, no one has gone back to try to rationalize and simplify it. We're after the workflow problem and we're going after the streamlining of the buying process. The message is that better performance doesn't require greater complexity, which is where display has evolved to today to a large extent.
How do you see the line between "ad tech" and "marketing tech?" How has Yahoo built up the "marketing tech" side of the business in terms of promoting the idea of a more "holistic" ad sales model?
SB: What we're doing around marketing tech is more about media planning. When you're sitting down to figure out a campaign and how much spending is a marketer going to do. How do we help that CMO see that Yahoo is the only place you can buy native ads, display, mobile, all of these various marketing channels in a seamless way, all the while supplying them with integrated reporting?
If you're going to move a lot of money online, Yahoo is a great place to start to test all the theories you might have about this space. What if I run a large-scale display campaign and then run a search campaign – what kind of lift do I get? What kind of keywords work best for both, and then, how do I take those same terms offline and how do I make all these campaign goals match up?
That's what I think of when it comes to our response to marketing tech. There are other areas of marketing tech that don't match Yahoo's mission, such as email automation. That's its own sector and category. But when it intersects into media planning, that's when it joins ad tech. And that's where Yahoo comes in.
DB: To add what Scott said, marketing tech is about going beyond advertising to addressing a broader array of needs and solutions. When you look at sponsored posts and sponsored content, that's not a traditional online ad function. As those offerings evolve, they start to look less and less like ads in some ways. After that, custom sites are things that we've always done for top-tier advertisers. Once you ad programmatic to the mix, the opportunities in marketing tech and ad tech tend to become closer, but still distinct.
Marissa's focus on consumer products has been much discussed. How do those two areas factor into Yahoo's ad tech strategy?
SB: Among the themes that Marissa talked about was how advertising and the consumer experiences are being weaved in together in a more organic way. Among the changes we've announced at CES, Tumblr's sponsored posts and Yahoo image ads have become part of the larger Yahoo Advertising group. Plus, if you look at sections like Yahoo Food, you'll notice that we're doing a lot of innovation in terms of how Yahoo Advertising works within our consumer products.
The presence of advertising has become much more pronounced the last few years at CES. How do you perceive the value of being there at this point?
SB: Having the software and services players here is really changing things. After all, companies like Yahoo don't sell gadgets; we sell integrated services that personalize experiences and entertain. That's part of what consumers are seeking: great, new innovations in software and services. That's why the advertisers are here; they want to learn about how this is changing their businesses. It's much more than trying to figure out a way to generate more demand for a new gadget. I don't see any of this slowing down.
In terms of what you're seeing at CES, what specifically is striking you as important?
SB: The issue of security and privacy is becoming more crucial. The challenge is that there are so many different players in the ad tech ecosystem. This is the year when everything moves to being more secure. It's not just about protecting privacy and responding to events in the news. It's just the right thing at this stage. Publishers and all other ad tech vendors are going to make that move.
Earlier, we announced that we've moved all Yahoo Mail to SSL. And that's part of a larger shift that publishers in general will be moving towards. For example, we won't take display advertising from third parties anymore than won't serve in a secure environment. You're going to see others take a similar step.