SCOTT BURKE: The Yahoo brand is around these consumer relationships and reaching them at different moments of the day for marketers. Flurry doesn’t have its own consumer apps, BrightRoll doesn’t have consumer apps, but they play a role in the fabric of the consumer journey. The things Yahoo learns in our relationship with you helps us personalize that experience. So the payback to the consumer is the relevancy of advertising and the payback to the advertiser is around access to a consumer as they hop from device to device and channel to channel. All of this is very fragmented, so the ability to tie that together is valuable to the brands.
Where are you right now in terms of accomplishing that vision and what do you still need to do?
SB: The major progress in 2014 was hitting scale with our native ad products, with Yahoo Gemini [a self-serve marketplace for mobile and video ads]. We needed a large-scale advertising product, and that became our Yahoo stream ads, which was then marketed as Yahoo Gemini. That powers a significant proportion of our display business and it also powers Yahoo mobile search. Many ads on mobile devices are served through Yahoo Gemini.
We’re investing heavily in a mobile ad product, and you’ll see that in the Yahoo app. So if you use Yahoo Fantasy Sports or the apps like Mail, you’ll see ads in there, and they’re all Gemini-powered. Any ad you see in Tumblr is Yahoo Gemini-powered. In 2014, we unified our mobile advertising products together and brought Tumblr into the fold.
This time next year, will BrightRoll and Flurry be folded into Gemini?
SB: You’ll see significant growth in off-network customers using Gemini. We already have some of those out in market. We’re taking it out to third-party publishers and signing those deals in two ways. We’re doing it as an ad product and as part of Yahoo Recommends, which is our content personalization and recommendation product for major publishers [like Hearst, CBS Interactive and Rolling Stone].
A year from now with Gemini you’ll see significant growth in the appearance and value of Gemini with publishers, either in the third-party play or as a standalone.
How many third-party publishers do you have in total and how many do you expect to have in a year?
SB: We haven’t stated a specific number, but it’s a very healthy pipeline. Even today, the discussions we’re at CES to have are with major publishers in town, talking about their needs for mobile monetization and content monetization. One of the big stories of 2015 will be publishers finding ways to drive traffic, monetize content and market content. It’s more important as you look at the way you can do content monetization in Tumblr. We’re seeing brands start to learn how to advertise in an environment like Tumblr, and seeing brands realize they’ve got a lot of content and need to put it into a marketplace to drive content marketing back to themselves, getting both the paid traffic and the earned distribution.
And if you don’t have a mobile solution that can tie identity across device, and integrate with content personalization, you don’t have a product for that need. I think that’s a new twist beyond just an ad tech play: It’s ads and content powering this experience.
When you mention those third-party publishers, you’re talking about display and mobile. Are you also talking about video?
SB: Yes, video is a part of that.
And that video is powered by BrightRoll?
SB: Flurry and BrightRoll. One of the Flurry ad products has been a very successful native video unit inside mobile apps. They have different video products performing well. Yahoo traditionally hasn’t had as much in off-net video, so that’s where these guys fit in and complete our picture.
What’s the status of BrightRoll’s DSP? Has it fully transitioned from being an ad network?
SB: It’s fully in market. The BrightRoll console is part of the offering and not positioned separately. BrightRoll enables you to buy media through the BrightRoll network, which is their roots. They have the BrightRoll Marketplace where third parties come in and bring their own data and optimization and bid into a wide open liquid marketplace. And they’ve got the console, where you come in use the UI and operate your own campaigns using their technology. They run three businesses, all successful, all growing, but there’s higher innovation in the market right now around the console and the marketplace, because those are the programmatic offerings.
There’ve been rumblings you’ve been interested in MediaMath or Turn. What are your thoughts on building out more on your demand side?
SB: No comment specifically there. A year ago, I came to CES and announced Yahoo Ad Manager Plus. We talked about Yahoo Ad Manager, which became Gemini shortly thereafter. We’ve made a lot of investments in the past 12 months on the demand-side because it’s important to have a close relationship with the agency and the advertiser. Not all will use Yahoo demand-side offerings. But they all want to buy Yahoo supply, use Yahoo data and have access to Yahoo consumers. At the end of the day, it’s important we drive an objective for them. The exact piece of technology isn’t important here.
So will there be more demand-side acquisitions in 2015?
SB: Again, we won’t comment on that, but we’re always interested in the right strategic moves. We have a lot of assets right now, so expect product announcements from Yahoo in the next few months. We have a lot of things in the pipeline.
Simon, what is Flurry exactly? Is it an exchange, analytics or is it a buying platform?
SIMON KHALAF: There are three pieces to Flurry. The first is the analytics piece. This is how we work with a lot of developers. We have 620,000 applications that have integrated Flurry, which reaches 1.6 billion devices. The analytics piece gives us a great vantage point and gives the app developers the ability to improve their applications.
On top of that, we have a supply-side platform, which is effectively a marketplace, exactly like the BrightRoll exchange. It is video inside mobile applications and native inside mobile applications.
We have 40 or 50 DSPs that are connected that can come and buy exactly as they would on BrightRoll. We also have a DSP, though it’s only focused on the app market, so app install and app engagement. You cannot buy brand advertising on the Flurry DSP. It’s highly specialized and uses Flurry data, uses tons of machine learning, and it’s not open to other data sources. You can’t load Acxiom or Datalogix into that. It’s focused only on app marketing.
Will it expand beyond app marketing?
SK: We do not need to do that because Yahoo already has that. I’d say we’re fully featured. We’ve got what we need. It doesn’t mean we’ll turn down a major strategic opportunity, but we’ve got what we need.
We just need to package it together and get it out.
We hear about mobile inventory and video inventory. How is mobile video situated in this?
SK: Mobile display will decline. You cannot take something that works on the desktop and shrink it to fit the mobile screen. Mobile video is by far the fastest growing unit on Flurry. I’d say 70-80% is video. So native and video will be the units of choice for mobile.
What do you mean by native?
SK: I say native because mobile applications differ from websites. Websites all look the same. But with mobile applications, there’s a huge difference between the Uber app, Facebook, Snapchat, a game or CNN. You have to assemble the asset accordingly and build it inside the experience. We’re very bullish on native advertising as well as video.
How do you work with BrightRoll?
SK: It’s different advertiser goals. There’s zero overlap. BrightRoll focuses on brand and brand advertising. We focus on trailers for games, trailers for movies. I call it video performance advertising. I show you a trailer in order to get you to download the app. So we tackle different segments of the market.
Are those goals mutually exclusive? For instance, there are commercials for the app "Game of War" during NFL broadcasts. Assuming it also has online spots to drive downloads, it’s a combination of branding and direct response.
SK: It’s not that we don’t do branding campaigns. We actually do. But we don’t charge on a CPM basis. We charge on a performance basis. That doesn’t mean you’re not creating impressions, but we charge per install and per engagement.
So for clients that want both branding as well as direct response, do you work closely with BrightRoll?
SK: It’s working as we speak. You can put a video campaign on Yahoo Advertising Manager that can run on the Flurry network. The data is already there. You can select your segments and run your creative.
And I can use that data to influence a BrightRoll buy or a Gemini buy?
SK: You can do whatever you want. It’s working right now. If you are a game developer or app developer, you’ll probably still come to the Flurry console for now. It’s easier.
But if you want to do a branding campaign or upload your own data, there's Yahoo Advertising Manager Plus.
So what’s on the road map?
SK: We set Feb. 19 as the date to disclose our mobile platform strategy. We’re focused on giving developers strong tools to build excellent applications.
How accurate was the report that you’re creating a self-serve mobile ad platform that integrates Flurry and Gemini?