Three Portal Amigos Defend Their Plan

Representatives from Yahoo, AOL and MSN attempted to lay out some of the rationale behind their new alliance at the AppNexus Summit in New York on Thursday. But several questions remained unanswered.
As they did during Tuesday’s official announcement, the portals portrayed the partnership as designed to make it more efficient for advertisers to buy top-flight inventory at scale. In fact, Jim Heckman, Yahoo’s svp of strategy and emerging businesses, objected to the idea that each portal’s unsold inventory should be referred to as “remnant.” He estimated that 70 to 80 percent of Yahoo’s inventory technically goes unsold, but “it’s great content. In fact it’s more of our content. It just doesn’t have a sponsorship attached.”

Heckman and his counterparts at AOL and MSN each insisted that selling audiences across each other’s inventory will yield previously unavailable demand. “We need to package things better,” said Dave O’Hara, COO of Microsoft Advertising. And brands want to purchase audiences using data, but aren’t as comfortable buying on a scatter basis as direct-response advertisers are, argued Heckman. Thus, the combined bulk inventory of the three partners should help. “You can’t plan serious brand campaigns every nanosecond,” Heckman said.

But while laying out some of the details behind the triumvirate, the executives’ comments exposed some perhaps-contradictory logic supporting the deal. For example, the concepts of buying “premium inventory at scale” or “brand-safe content at scale” were raised multiple times as being a key outcome of the collaboration. Heckman said buyers will have access to “three times the reach.”

Yet earlier in the session, Heckman touted Yahoo’s own sheer size, saying the company recently passed 700 million unique users globally – on its own.

Plus, each member of the group repeatedly pledged simplicity as a key benefit of this alliance. Yet the outcome of the alliance still requires buyers to buy from three separate entities, each with its own data packages and parameters. “Each partner makes its own rules,” explained Heckman.

These rules, it should be noted, are still being written, as the alliance prepares to launch by January. When asked if that means that agency trading desks can access inventory via each portal through their various sales channels, the group didn’t have a clear answer. However, word had trickled out by Thursday that Yahoo, in particular, was cutting off retargeting companies from buying inventory via its network and exchange.

Regardless of the complicated nature of the arrangement, the group emanated confidence during Thursday’s session. AOL’s Dave Jacobs, svp of publisher services, summed up the alliance’s lofty goals. “We think this will really facilitate the growth of brand dollars online.”

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