Yahoo Taps Ad Network Chitika To Deliver Mobile Ads

Chitika_KolluriYahoo will roll out targeted mobile ads through its partnership with ad network Chitika, the vendor confirmed. Chitika has worked with Yahoo since 2006 and already uses the company’s location and time-based ad targeting technology to deliver paid search listings across its web properties and across Chitika’s network of publishers.

Yahoo has now tapped the Westborough, MA-based company to help it tackle the “fat finger syndrome” of mobile advertising, according to Chitika CEO Venkat Kolluri. Yahoo is interested in “finding a way to insert touch-based text ads into the mobile world that are better than the advertising you see with mini banners,” Kolluri told AdExchanger. “On mobile devices, a lot of the clicks are accidental, so we are taking a two-prong approach to make sure people want to come to your site.”

If a consumer in Manhattan opens a Yahoo-owned site at noon, such as Yahoo Answers, Chitika will show the user icons for dining, travel, parking, etc. on the app. By tapping on the dining icon, users will be asked if they would like to see page listings related to local eateries. Using a last click – or, as Kolluri calls it, “a second-click” attribution model – advertisers pay a fee if users click a link on the listings page which will direct them to the brand’s website. Chitika’s mobile ad serving technology will be applied across Yahoo’s mobile properties.

“We’ve taken the consumer through two stages to make sure that last click was not accidental, and this drives revenue for Yahoo,” Kolluri claimed. The company did not yet have any conversion rates to share for its mobile platform, Kolluri said, but he noted Chitika ads (web and mobile-based) are served four billion times per month and shown on more than 250,000 websites. Chitika has about 100 employees and its other advertising partners include Superpages and Yellowbook.

After Yahoo announced its first-quarter earnings last month, CEO Marissa Mayer told analysts that its mobile services had about 300 million monthly visitors worldwide, up from 200 million in December.

Despite the increased traffic, Yahoo’s display ad sales decreased 11% from the same time last year, and search revenue, excluding sales passed to partner sites, dropped 10% to $425 million. Yahoo is also competing with Mayer’s former employer, Google, and with Facebook, which command a larger portion of marketers’ online budgets.

In an interview with Bloomberg TV earlier this year, Mayer explained that partnerships would play a large role in Yahoo’s mobile strategy. The Chitika deal suggests that strategy extends to the advertising arena as well.

“Given that we do not have mobile hardware, a mobile OS, a browser, or a social network, how are we going to compete? I think that the big piece here is that it really allows us to partner,” Mayer said. “It means there is an opportunity for strong partnerships. That is what we will be focused on.”

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