Yahoo Hops Aboard The App-Install Ad Train

yahooinstalladsApp-install ads are where the mobile cash is – at least for now – and Yahoo is starting to capitalize.

The company said Tuesday that it’s making app-install ads available through Gemini, Yahoo’s self-serve marketplace for native and mobile search ads. Advertisers will be able to promote their apps to roughly 550 million monthly mobile users across the Yahoo network, including on Tumblr, via apps like Yahoo Weather, Yahoo Sports and Yahoo Finance and through the Yahoo recommendation engine, Yahoo Recommends.

Yahoo first started testing the units back in March.

The ads may be focused on grabbing installs, but Yahoo has set its sights on measuring post-click activity, including how intent leads to conversions and ROI for the advertiser.

And that means doing more than just “shoehorning what we know about desktop into mobile,” said Enrique Muñoz Torres, VP of product management at Yahoo.

“No player in the space, Yahoo included, has nailed what mobile advertising should really look like, but we want to be at the forefront of experimentation to take advantage of mobile’s unique attributes,” he told AdExchanger. “With app-install ads and with other mobile products we’ll come out with, we’re going back to first principles.”

Developers have been asking Yahoo to support product app installs for a while now, said Muñoz Torres. The ads will work in tandem with the app analytics functionality Yahoo brought on board when it purchased Flurry in July.

“We’re using whatever sources of data we have at our disposal to be able to show the most relevant ads to users,” he said. “The Flurry team is helping us better understand mobile and installs and to ultimately build more products like this one.”

In terms of the units themselves, native has proven itself to be an ideal format for mobile, Muñoz Torres said. Ads that blend into the surrounding content are simply more engaging.

“We focus on native because it works so well and it works so well because mobile is a unique canvas. In order to be truly effective, advertising needs to be fully integrated into the app experience,” he said. “At Yahoo, we’ve experimented with a number of other units, but when we moved to native in Yahoo properties, it was night and day in terms of our ability to monetize and in terms of the value we could bring to advertisers.

“We saw how well it worked with Stream Ads, so we doubled down on those efforts, and now native has become a cornerstone of our mobile advertising strategy.”

Yahoo is clearly working to position itself as a mobile contender, and hope – which springs eternal – appears to be turning into somewhat of a reality. According to eMarketer, Yahoo, which started reporting its mobile revenues for the first time in Q3 2014, is slated to represent 3.2% of the nearly $19 billion US mobile ad market in 2014.

For comparison’s sake, Google’s 2014 mobile market share is at 37.2%, with Facebook and Twitter trailing at 17.6% and 3.6%, respectively. Yahoo’s share will climb to 3.7% in 2015 – market share the company will ostensibly be stealing from its heavy-hitting competition.

“Yahoo is committed to working hard for publishers and advertisers,” Muñoz Torres said. “This will be the first of many products that will be mobile first, and we believe that they will drive good value for everyone.”

Not everyone is convinced, however, that Yahoo has what it takes to be a serious mobile player.

Although app install ads have been quite the moneymaker for Facebook, which entered the game way ahead of the competition back in 2012, there’s been pushback from developers who complain that the units are too pricy, even though they perform. According to Facebook ad partner Nanigans, CPMs and CPCs on Facebook ads rose nearly 30% YoY between Q2 this year and last.

Following Facebook’s lead, both Google and Twitter introduced app install ads in April. And now there’s Yahoo bringing up the rear, joining the app-install craze after the party is already fully in swing.

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