According to a story recently appeared on the New York Times, the newspapers participating to the Yahoo consortium seem to be benefitting economically from the use of APT, Yahoo’s own advertisement platform, despite a number of other newspapers and news agencies are currently facing very hard times because of the ongoing economic crisis.
The consortium was first established in 2006, where it started with 176 dailies. Nowadays, the consortium groups nearly 800 of them and is hailed by Yahoo executives as one of the most valuable company assets. In addition, because of the peculiarities of the APT program, the NYT reports that many newspapers see the partnership with Yahoo as “one of the only bright spots in an otherwise horrible advertising market”.
Through the partnership, in fact, ad salespeople at newspapers pitch local businesses on advertising packages that let them reach visitors to the newspapers’ Web sites and Yahoo users in the area. The deal also includes an option that makes it easy for newspapers to charge more for ads on their websites based on where they are being displayed.
“[The advertising program] seems to be hitting the sweet spot for both newspapers and Yahoo,” said Lem Lloyd, a Yahoo vice president for the partnership. But, as the Times notes, while the partnership seems to be a good deal for newspapers in terms of generated revenue, it may still not be enough to contrast the ongoing economic crisis this sector in particular is experiencing, affected by sudden drops in the local companies’ advertisement budget.
“No one expects that the partnership will make up for what’s ailing Yahoo or the newspaper industry any time soon. Consider that on Friday E. W. Scripps, the owner of the Knoxville, Ventura and Naples newspapers, closed The Rocky Mountain News, one of its flagship properties. The San Francisco Chronicle, one of the first papers to make use of all parts of the Yahoo alliance, is being threatened with closure by its owner,” wrote the Times.
When the partnership first began in 2006, it was initially focused on sharing employment classifieds. However, over the course of the last year, over half of the alliance members have agreed to test two new features that have proven quite successful for both parties.
The first feature is an innovative advertising system that allows newspapers to sell targeted graphical ads on their corporate websites, aiming at specific profitable niches — such as car buyers or investors — thanks to behavioral targeting. In other words, each visit in the newspaper’s site is logged on Yahoo’s servers, and the system displays ads that are relevant to the kind of pages that were previously visited by a certain user on the same site, regardless of what a specific page is about.
The second main feature introduced by the Yahoo partnership is the ability to sell ads on the Yahoo.com pages with a revenue sharing program, which guarantees more traffic to the corporate site and allows newspapers to guarantee to their advertisers that a predetermined number of ads will be served in a certain timeframe. Yahoo also benefits from this deal because the additional adds translate into higher rates for pages that are typically generating low click-through rates, such as those on Yahoo’s webmail service.
Although some newspapers executives are seemingly worried that the recent changes in the Yahoo management could end up affecting the partnership, a company’s spokeswoman recently reassured them by telling the New York Times that Bartz has no intention to end the privileges that the consortium can currently benefit from. “Carol looks at this partnership as core to Yahoo’s future,” she said.
Dario Borghino is a computer engineering student at Turin's Polytechnic, Italy. He started writing science and technology related articles in February 2008 and his articles have appeared on sites such as ISEdb.COM, eHow and Suite101.com.You can visit his personal Web site here.
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