Yahoo’s Foster: Despite Earnings Talk, Advertisers Are Not Disappointed In Genome

Peter FosterOne particular area of hope for Yahoo has been its acquisition of data management platform interclick, for which it paid $270 million November 2011. But the financial boost it provided was deemed “disappointing” by CFO Tim Morse  during the company’s Q2 earnings call last week.

AdExchanger spoke with Peter Foster, Genome’s GM, on the integration of Yahoo’s data stack into the interclick system, which collects data from third party sites. The platform is now called Genome.

AdExchanger: Could you put CFO Tim Morse’s comments during the earnings call into some context?

PETER FOSTER: We’ve been ecstatic about the progress that we’ve made creating Genome, which is fundamentally built on the interclick technology. There have been some significant advantages that interclick has in terms of supply access with Yahoo’s stack and some of the partnerships that we have in place as well as data. We pump all of the data from Yahoo into OSM [or, “Open Segment Management,” an audience valuation technology that was crafted by interclick].

interclick went from having more third party data than anybody else had to now actually having all that plus Yahoo data — which nobody else has in the market. Theoretically, we have more facts on more users, on more impressions, than anybody else. That should lead to being able to correctly identify the facts that are driving the results for a particular campaign.

How do you make that vast amount of data actionable instead of confusing and paralyzing to a marketer? And how has that translated into revenue for Yahoo?

The more we know, the more we can identify what combination of data on supply is driving the results. They grew significantly, even in Q1 and Q2, significantly above market in terms of revenue.

On a year over year basis, if you [look only at] interclick, they’ve grown significantly above market in Q1 and Q2 and will continue to grow significantly above market in the last half of the year. While Tim [Morse] may have stated that he was a little disappointed, I would say that simply from our perspective that it’s not the case or from the advertiser’s perspective. I think it’s more from a CFO vantage point. He wants them to integrate faster and drive revenue faster, but we’re happy with the product.

After the combination between interclick’s and Yahoo’s data stacks, has the process in which an advertiser works with you changed significantly? How does Right Media fit into the process?

[Interclick] had a great retention rate with their advertisers, but we’re now able to do more, do it more efficiently, drive down ROI, and drive up scale at the same time. That’s clearly the method there.

We love the RMX [Right Media] technology. We continue to use it when appropriate, but we’ve also taken what we think is the advanced analytics approach with Genome and started to look strategically at campaigns that have traditionally run on Yahoo “Network Plus” inventory — and therefore run through the RMX — and improve them both from an analytics, data availability and scalability perspective by moving them over to Genome.

We’ve been strategically working with advertisers to move them in that direction when it makes sense. We’ve also kept the RMX platform available for campaigns that have worked well there. In some cases, we’ll run on both stacks to take advantage of the capabilities on both sides. There is lots of opportunity for us to improve the performance of existing clients on both sides, as well as take advantage of the connections between RMX and OSM, which is the Genome stack.

I’ve always thought of interclick as a DMP. Now that it has morphed into Genome, is it still a DMP?

Being a data management platform is certainly a component of what Genome does. But it’s not a service that we bring to market. We don’t go to advertiser “X” and say, “We’ll host all your data and we’ll let you parse it out for use in email campaigns.” We’re not a third party DMP the way that a BlueKai or those people are.

We do obviously have access to a lot of data, but we don’t host it. That said, we’re integrated with BlueKai, so that every time we serve an impression we know everything that BlueKai knows about that user, and we have access to all the segments that they have. The case is the same with our over 25 other partners. The point being that I don’t host that data, but I purchase it and have access to it all the time. That includes search retargeting. Again, it’s whatever’s available in the market, we’ll go buy it.

That being said, Genome takes that knowledge about data, and obviously, we are our own DMP. Genome is and Yahoo is its own DMP for Yahoo data and Yahoo segment. We have access to that in relatively the same way.

So what do you call Genome? A “DMP-plus?”

You could call it a variety of different things. But essentially it’s the ability to run a campaign digitally that takes advantage of every component of the process. Data’s just one thing, media’s just one thing, analytics and output is just another thing. When you put all those things together and you can manage them for a client, it’s a hugely informative exercise for them, and it also drives great performance. We are sure of that.

I would highlight a couple other things. From a media perspective, we do source some inventory on exchanges, in particular obviously RMX. We source the vast majority of our supply through direct relationships with publishers. Meaning that we buy above exchanges by calling up publisher X and negotiating a supply arrangement.

It gives us a lot more visibility into the supply that we’re buying, into the viewability of that supply: Is it above the fold? Can we secure that kind of inventory? How much are we going to get?

Has Marissa Mayer, who’s only been CEO a few days, communicated anything about the importance of Genome?

The only thing we can say right now is nothing has changed and we’re still moving forward.

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