When Yahoo eyes the future, it sees the words “premium mobile media company” appended to its name in lights.
That’s been the hope since Marissa Mayer became CEO in 2012. Recent acquisitions of video DSP BrightRoll and app analytics company Flurry speak to Yahoo’s plans and Mayer herself articulated those plans at the Goldman Sachs tech conference in early February.
“We needed to reinvent ourselves to become a mobile application company to make money off advertising,” she said. “So, now it’s a material part of our business, and we have worked hard to build that foundation.”
Yahoo, which sees about 575 million active users per month, will finally be getting into specifics on how it intends to help developers monetize their apps at its Mobile Developer Conference in San Francisco on Thursday.
But we already know that Gemini, Yahoo’s self-serve native and search product, is a cornerstone of this mobile-minded agenda.
In addition to integrating data derived from Tumblr and Flurry into Gemini, Yahoo is also making Flurry app install ads and Tumblr sponsored app ads available through the Gemini platform. Flurry will likely be rolled into Gemini in an effort to keep devs happy and help Yahoo compete with existing app monetization solutions from Facebook and Twitter.
“The evolution of the Internet from desktop to mobile and changes in the way users use Yahoo products are all incredibly important for us as we design new advertising products,” said Enrique Muñoz Torres, VP of product management at Yahoo and a lead engineer on Gemini. “That’s why we need to be mobile-first and come up with ad formats and performance units for the mobile traffic we’re seeing.”
Muñoz Torres was unperturbed by critics who emphasize Yahoo’s lateness to the mobile game (Facebook and Twitter have had mobile firmly in the cross-hairs for years).
“What matters is that we’re driving good performance for advertisers and a good experience for users,” he said. “For me, the real question isn’t necessarily who ships a product first, but which company will be at the forefront with ad units, pricing models and a marketplace that works. Mobile advertising is not a solved problem by any stretch of the imagination. I don’t think any advertising company out there has nailed it yet. I wouldn’t say Gemini solves it completely – but we’re making progress.”
In 2013, Yahoo introduced Stream Ads, its first step toward creating a native advertising solution. Stream Ads, which are designed to blend into surrounding content, are used in personalized content streams across Yahoo O&O properties, including Yahoo News, Sports, Movies and Mail.
“That ramped up pretty quickly as we saw that native was performing really well for us and for our advertisers,” Muñoz Torres said. “But toward the end of 2013, we had the realization that, although we were doing native, we were kind of missing out on something really important – and that’s search.”
Yahoo added mobile paid search to its product offering in 2014 and renamed it “Gemini.”
“Today, in a nutshell, Gemini is a marketplace that offers both native advertising and mobile search,” Muñoz Torres said. “Search is one of the things that’s going to take this marketplace to the next level, the ability to traffic ads across both supply sources. Native and search complement each other on mobile.”
According to a joint 2014 study conducted by Yahoo and market research firm Ipsos, the combination of search and native on mobile is a potent one. Ipsos found a 27% lift in likelihood to recommend a product and a 31% increase in brand favorability among consumers exposed to both content/image rich ads integrated into the Yahoo stream and text-based mobile search ads.
“Advertisers can create a more unified campaign if they run both search and native,” said Muñoz Torres. “That’s what’s going to make this marketplace stand out.”
While Gemini supports Yahoo O&O, advertisers can also access premium properties outside of Yahoo – basically syndication of Yahoo Recommends through Gemini – including on Rolling Stone, Hearst and CBS Interactive.
Advertisers supply the assets – image, copy, landing page – and Yahoo provides the targeting and the cross-screen placement. Advertisers then select their desired audiences through the platform – traditional demographics, user interests and the like, as well as first-party data brought in by the advertisers themselves – much in the same way as they’d do for any of the products under the umbrella of Yahoo Advertising.
Gemini: What It Isn’t
Yahoo Gemini is not an exchange – and it has no desire to be one.
“We definitely have no aspirations to be everything and anything and we’ve deliberately shied away from having Gemini be a display marketplace,” said Muñoz Torres. “Native and traditional display are fundamentally different things. Both are valuable and fit differently into advertiser needs, of course, but we want to be very focused when it comes to Gemini. With Gemini, it’s just about native.”
That said, Gemini does engage in off-network extension via premium publishers, as previously mentioned.
Of course, that doesn’t mean Gemini won’t ever develop a more exchange-like structure down the line.
“We’re working on syndication, although that hasn’t evolved into an exchange thus far,” Muñoz Torres said. “We might end up doing that in the future but, for now, the network model is working fine for us.”
Another thing that Gemini isn’t is integrated with other Yahoo Advertising products. At least not yet. It’s true that Tumblr and Flurry units are available via Gemini, but that’s where the integration ends. Further news on that front is likely to come out of Yahoo’s Mobile Dev Con.
“In terms of integration points, we’re always looking for ways to make our products easier to understand,” Muñoz Torres said. “We don’t have any integration point with products like the Yahoo Ad Exchange or Yahoo Ad Manager Plus, but we’re always looking for ways to do so. You’ll be hearing about such developments coming in short order.”
What They’re Saying
Some might argue that Yahoo is still at the base of the onramp in terms of becoming a mobile contender, but the company claims that revenue from native ads is on the rise, growing 32% between Q3 and Q4 2014. On the Yahoo’s Q4 2014 earnings call, Mayer told investors that mobile revenue was at $254 million, up from $207 million the previous quarter. Total revenue in Q4 2014 was $1.26 billion.
According to Muñoz Torres, Yahoo has a wide variety of clients using the platform, including direct-response advertisers, app developers, SMBs, larger brands, agencies and even a number of publishers looking to drive traffic to their sites or to sell subscriptions.
“Quite frankly, it’s a little bit of everything,” Muñoz Torres said. “You can see the diversity when you go into Yahoo properties and look at the ads coming out of Gemini.”
Performance marketing company Acquisio has about 300 clients using Gemini, including Hilton and YP.
“Beyond the obvious opportunity in native, Gemini is also the most important untapped source of legitimate mobile search traffic in the US,” said Acquisio CEO and co-founder Marc Poirer. “We see local advertisers are finding tremendous value as they invest behind success, and many of them are deploying larger budgets.”
Performance media agency Camelot Communications, whose clients include Southwest Airlines, the NFL, 7-Eleven and TurboTax, uses Gemini, in part, for scale.
“We’re seeing that native does work. It helps us combat banner blindness,” said Alfred Van Hoven, VP of interactive at Camelot. “We know eyeballs are moving there. Just look at the growth on Facebook and on Twitter. But to get that scale elsewhere is very difficult and that’s what Gemini brings to the table. CPMs are really starting to move north in the DSP world and the RTB world, so this is a place for us to get ahead of the competition from a direct-response perspective.”
Speaking of direct-response, online loan marketplace LendingTree.com is using Gemini to amplify its content-related financial products on Yahoo O&O.
“Given we’re a strict direct-response advertiser, we have very aggressive goals when launching any marketing campaign,” said Mike Marcantonio, director of online marketing at LendingTree. “Gemini has been able to hit these goals consistently.”
In terms of results, ad-management platform Marin Software, which announced an integration with Yahoo Gemini in November, has “in the high hundreds or even low thousands of advertisers” on its roster using Gemini, said Wes MacLaggan, Marin’s VP of product management. Marin clients are able to manage the performance of Gemini campaigns and track spend in a single interface.
One such customer, Hotels.com, has seen an a increase in performance relative to its core search business and a near doubling in click-throughs, as well a boost in conversions.
Although the volume on Gemini is lower than other networks, MacLaggan said his clients are pleased regardless.
“The channel is effective from an efficiency perspective and we’re looking for more volume,” he said. “People are getting used to seeing native and Yahoo has done a good job of creating an experience that’s not annoying or overwhelming.”
