Yahoo's APT (Part 2): A few questions for Jerry Yang

Yahoo’s launch of APT showed signs of haste. These included a press release that appeared to have been written by a chimpanzee on Ritalin.

That’s not really a problem. In fact, it’s a good sign that the big promises made by Jerry Yang yesterday have prompted some chunky questions. These include:

Streamlined workflow:

At yesterday’s launch, Sue Decker of Yahoo criticized the “crummy processes” that lie behind web advertising:

The current ad delivery system is broken. Even for online advertising, it takes 30 steps — including still having to fax invoices and multiple requests for proposals that can take up to six weeks.

In this respect, Editor & Publisher underlines one apparent triumph for Yahoo. Apparently, APT can render “test formats” for advertisers in less than half the time taken by DART (a widely-owned ad serving platform owed by DoubleClick).

Question: How quickly can APT supplant DART in the affections of publishers and sales managers?

Cross-selling

The web rewards both global scale and microscopic niches. Getting stuck somewhere in between these two extremes has been the uncomfortable fate of many traditional news organizations.

This is why APT’s apparent power to aggregate audiences from different publishers makes a lot of sense. Disintermediating ad networks — properly automating them out of existence — could be an attractive prospect for publishers.

In the UK, would this mean ad hoc alliances between rival chains forged online at APT? In the UK’s geographically-fragmented market, this would have its attractions.

Sooner or later, presumably, the Competition Commission will be required to think about this. . .

Behavioural targeting

Yahoo’s supposed prowess in behavioural targeting is cited as a major attraction for the US newspaper groups collaborating on APT.

This makes sense. Yahoo has been running massive display-based sites for years. The company possesses the kind of technological nous of which traditional media organizations can only dream.

But how good is Yahoo’s behavioural stuff? Have Microsoft or Google got better tricks up their sleeves?

Of course, there’s also the spectre of Phorm, and data security more generally. . .

Openness

Lots of blather about this in Yahoo’s marketing material. But few specifics. Yahoo’s Jerry Yang has promised a 2.0-style platform.

If this means anything, it means open application interfaces with which developers can tinker to their hearts’ delight. The result could be a raft of add-on software that increase APT’s value — to clients and agencies in particular.

Yahoo has a decent track record when it comes to openness. Let’s hope it continues in the same vein.

The financial balance of power

In all of the coverage, there was little mention of how Yahoo intends to make money from APT. Here’s how the FT frames the quid pro quo at the platform’s heart:

Hilary Schneider, executive vice president of Yahoo US, said Apt would allow Yahoo to tap into a $9.5bn local online advertising market, using the more than 8,000-strong sales force of its partners in the Newspaper Consortium.

In turn, publishers would be able to sell online inventory from other sites, including Yahoo, to their advertisers under a revenue share agreement.

Yahoo would pool its information on users’ search behaviour with publisher’s knowledge of their location or interests to target advertising more effectively, she said.

The detail is still sketchy, but the aim is clear: collaboration involves Yahoo generating ad revenues from traffic supplied by newspaper sites (and vice-versa).

But who wields the balance of power? How many of the financial benefits generated by APT does Yahoo propose to trouser for itself? How much will revert to the media organizations who bring to the party the volume (and variety) that’s required to operate an online trading exchange?

When it comes to sharing the spoils generated by search ads with media partners, Google has been both secretive and tight-fisted. Will Yahoo be any better? Paradoxically, the company’s commercial weakness suggests that this might be the case.

Is France the capital of Paris?

Yahoo has always been a highly US-centric outfit — even before the recent painful exodus of high-level talent from its European operation.

So it’s a valid question: when will Yahoo deign to expand APT to Europe?

APT will require a lot of selling in Europe. As Google knows to its cost, media agencies are much more powerful here than in the US.

Arguably, too, European newspaper groups are in better health than their US counterparts. They may therefore be less willing to do deals with Yahoo.

Has Yahoo got a timetable for dealing with the Rest Of The World? If it has, it wasn’t saying so yesterday.

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