This morning ShopLocal announced a partnership with Yahoo! that will see distribution of ShopLocal’s inventory of retailer “circular ads” across the Yahoo! network. These are all local ads because they’re tied to specific stores or retailers in particular areas:
Retailers will now be able to reach potential shoppers among Yahoo!’s 140 million monthly unique U.S. audience(1) more efficiently and with greater precision than ever before by harnessing Yahoo!’s Smart Ads technology which automatically generates customized advertising based on users’ preferences. The program is intended to supplement existing newspaper-based marketing programs for retailers by delivering other key benefits like incremental reach, cost efficiency, flexibility in regional pricing and product availability, as well as the opportunity to deliver advertising throughout the week – not just on Sundays when circulars appear most often.
Yahoo! takes ShopLocal circular content and will configure ads dynamically based on user search and behavioral data, geotargeting, demographic and contextual targeting parameters. Geotarageting will be based on user registration information, IP targeting and search data.
The ads are being assembled from different creative and text components. As they “expire,” because they’re all time-based, they’ll be pulled from the system (that’s part of the ShopLocal “secret sauce”). The ads will appear in various places throughout the Yahoo! network.
This is a big deal because of the degree of dynamic personalization being brought to the inventory for both users and retailers. It’s a validation in some sense of Yahoo!’s dynamic ad serving strategy. One would expect response rates to be much better than the >.25% that display ads typically see online. Retailers, through the Yahoo! distribution, will be getting massive reach, although the ads will be theoretically targeted to individuals.
The search component will contribute to behavioral data factored into the targeting. For example, if I perform a search on Yahoo! for “laptop computer,” I could well see a display ad for “laptops on sale” at my local Best Buy somewhere else on Yahoo! later in the day or week.
The strategy and model are also consistent with the dominant consumer use case associated with products: research online, buy offline.
Barry Schwartz at Search Engine Land has written up a number of other Yahoo! announcements made today.