Yahoo! Extends DSP Deadline To Jan 11; VP Dallaire On Yahoo! Inventory And Strategy Ahead

Seth Dallaire is Yahoo! Vice President of Sales.  He discussed the latest news regarding demand-side platforms and Yahoo!’s decision to require Right Media Exchange seats for advertisers who wish to purchase Yahoo! non-guaranteed, remnant display inventory through the exchange. News broke last week that Yahoo! would make this a requirement going forward – but today, the company is announcing a grace period. More info on Yahoo!’s advertising blog here.

First, Dallaire offers the following:

“We strongly believe in a premium content ecosystem that matches publishers, agencies and advertisers with premium ad solutions that drive better results in a fair, efficient manner. We also believe that the past few years have seen a significant shift in how digital inventory is bought and sold, which has complicated the valuation and management of digital media.

Yahoo! is making some bold moves, like changing access to Yahoo! Network Plus inventory, that are designed to put value back into the premium content ecosystem.” What are the options for ad networks and DSPs who want to buy Yahoo! owned and operated display ad inventory today?

SD: DSPs can buy Yahoo!’s non-reserved inventory in a couple of ways. They can create a direct relationship with the Yahoo! sales team, which will execute the buy on their client’s behalf or they can create a buying relationship on the exchange through their client’s seat.

What does this move to requiring seats for advertisers who want to buy Yahoo! owned and operated remnant display say overall about digital media and the publisher today?

Publishers have always had direct relationships with advertisers.  However, the fast growing trend of “resellers” and intermediaries in the digital marketing landscape has created some serious challenges between publishers and advertisers.  This initiative is part of Yahoo!’s ongoing effort to ultimately ensure a better experience for our users and advertisers.  Users will experience fewer duplicative ads across our network, and advertisers will reap the benefits of working more directly with Yahoo! to maximize the value they receive out of their media buys.

Why was the timing so abrupt?  

We’ve been saying for some time that we strongly believe in a premium content ecosystem that matches publishers, agencies and advertisers with premium ad solutions that drive better results in a fair, efficient manner. We have been meeting with various parties for some time to explain our position and outline the benefits to advertisers and agencies.

Will there be extensions?  If so, any criteria you can share?

Previously we had set the date as December 2 but we have extended the deadline to accommodate our clients and the subsequent demand for seats on the Right Media Exchange. We now plan to implement by January 11, 2012.

What measures are being put into place to help advertisers get their own seats and DSPs access to those seats?

Right Media is a leading global display ad exchange with limitless seats, serving many clients. They are always ready to have new members join the exchange.

How will agency trading desks (ATDs) and agency buyers in general be treated in comparison to DSPs?   Will ATDs need to have their advertisers get their own seats?

Yahoo! has always been committed to partnering closely with advertisers and their agency partners.  ATDs that are fully owned by agencies will continue have the opportunity to buy directly from Yahoo! on a managed basis or via a seat on RMX.

What will Yahoo! do about its unsold impressions?  CPA deals, house ads?

As a result of this move and communications from advertisers, we are confident that advertisers will continue to seek brand safe inventory that performs at scale and that Yahoo! inventory will continue to be in high demand.

What about advertisers who don’t want to buy or manage their own RMX seat but prefer buying through a DSP due to a smaller budget or just preference? Any plans for them?

We encourage all advertisers who are interested in accessing Yahoo! inventory to discuss the options around setting up a seat on RMX with their Right Media and Yahoo! contacts.  Not all advertisers are the right candidates for seats on RMX but we can offer alternatives for these advertisers to accommodate their needs.

Can you talk about how this move is a part of holistic yield management strategy – both guaranteed and non-guaranteed (custom, integrated and remnant)?

This decision to assert greater control over Yahoo! Network Plus inventory is part of our ongoing campaign to improve the overall process of buying and selling premium online display inventory and put more value into the premium content ecosystem.

All publishers need to consider inventory yield management along both guaranteed and non guaranteed much in the way that advertisers need to consider the impacts of campaigns running across all inventory (guaranteed, non guaranteed, audience, sponsorship).  We want to partner more closely with an advertiser by programming specific audiences for that advertiser but cannot do so if we have limited insight into their demand.

By John Ebbert

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  1. I’m glad Yahoo realizes that less than a full week (including a holiday) is not enough time to transition customers over to their own seats (if that’s what’s appropriate for them).

    Yahoo is by no means alone in being overly optimistic about the ability for customers to make changes – e.g. when Doubleclick/Google moved their exchange from version 1 to version 2.0, they set a hard deadline (in January) which publishers were unable to meet and there was a lot of grumbling then too. January is a quieter time so certainly a better time for this kind of switch.

    There’s a difficult question that arises here, though, about fairness in treating various parties. The term DSP (something that Yahoo invented, or at least that’s where I first heard the term mentioned) is something that encapsulates a large number of companies who work on ad agency, tech provider, and ad network-based business models.

    I won’t fault Yahoo for making business decisions about how to treat intermediaries, but I think that there should be a clear set of guidelines about what constitutes an “agency” for whom having a bundled relationship with Yahoo is okay. If that is based on an amount of spend, or a level of advertiser transparency or something else fine – and if there are “DSPs” who can meet those requirements then treat them like “agencies”. Some of our biggest display ad clients at are companies for whom we are the sole buying representative and essentially are their agency, though we don’t term ourselves that.

    Another related point here – the point about “Users will experience fewer duplicative ads across our network, and advertisers will reap the benefits of working more directly with Yahoo! to maximize the value they receive out of their media buy”. Setting aside the fact that Yahoo today approves manually every single ad that runs on their network via the exchange and that you are not meant to run multi-advertiser rotating tags thereon, One thing that our industry needs is a canonical list of advertisers, offer types and perhaps even ads themselves. Have a centralized list where any USER, ADVERTISER or PUBLISHER can look up who is authorized to display a brand’s ads, who is their agent(s). Why do people pay $thousands to subscribe to databases to try to figure out who is representing whom and what their budgets are. On top of that, technology makes it easy to fake things. I guarantee you that we will see plenty of fake ads and websites in the future and this kind of step could have many benefits. I would love to see more discussion about this point.

    Yahoo’s Right Media system was built with many of these notions in mind (there is a complete list of advertisers available to exchange seat holders. you can see every single ad on the system if you are a seat holder) so I wonder why Yahoo itself cannot use those features to achieve it’s goals – but I think there will be a greater, growing overall need for this with more accessibility for people in the community and it should be discussed.

  2. Megan Pagliuca

    Yahoo is doing the best thing for advertisers and for their own business by requiring direct relationships. I am impressed and happy to see them making changes based on long term revenue rather than short term revenue.

    They have been incenting advertisers and agencies to have their own seat with proprietary data offerings like search retargeting for some time now. They just took this to the next level by enforcing this policy. The initial timeline during Q4 was a bit rough considering the operational burden of the switch so am glad to see they extended it.

    For advertisers and agencies, in accessing their own seat through their dsp’s api integration or through real time bidding, they will gain access to Yahoo’s proprietary data and gain value beyond what could be provided by just running through the dsp’s seat.

    I do think Rob has a point regarding the guidelines of what constitutes an agency but Yahoo will work through this. If you are a tech enabled agency with transparent pricing but mis-labeled by Yahoo, just call Yahoo and explain this to them, or BETTER have your advertiser call them. I am sure they will sort you out.