During her presentation last week at the Consumer Electronics Show in Las Vegas, Yahoo CEO Marissa Mayer announced the introduction of Yahoo Advertising, a consolidated advertising suite that brings together the company's various products for buying and selling online ads under one roof.
The move was intended to show the ad world that under Mayer, Yahoo is serious about catching up to its bigger rivals when it comes to advertising.
They are not all convinced, however.
Under the new Yahoo Advertising header, the company will house Yahoo Advertising Exchange, an updated and rebranded version of the real-time bidding exchange formerly known as Right Media. The company is also integrating its tools for managing data and targeting ads with those used to create and purchase ads across Yahoo and its partner sites.
The multi-million dollar question in the wake of this rebranding — or "synthesis of tools," as Yahoo ad tech executive Scott Burke says it should be viewed— is whether Yahoo Advertising will offer marketers something more than convenience to convince them to shift their spending from rivals like Google, Facebook, and Microsoft.
Though Yahoo was one of the first big companies to enter the real-time bidding space when it purchased the Right Media advertising exchange in 2007, it has been criticized for failing to make the investments adtech needed to keep up with competing exchanges like Google and AppNexus.
In 2012, it was rumored that Yahoo wanted to sell the exchange, and in 2013, the company lost a full percentage point of its share of the digital advertising market. Once the No. 2 digital advertising business in the U.S. after Google, Yahoo has since fallen behind both Facebook and Microsoft.
Tod Sacerdoti, CEO of the video adtech company Brightroll, questions whether Yahoo will be able to continue improving the technology underlying its ad exchange, which Yahoo says will now offer access to greater advertising inventory and more specific audience groups.
"The uncomfortable thing underneath this announcement is that Yahoo has not released a single innovation or product based on programmatic since the purchase of Right Media," said Sacerdoti, whose company has an ad exchange of its own. "It’s trendy to talk about programmatic, it’s much harder to actually innovate in programmatic.”
But Pete Stein, CEO of the digital advertising agency Razorfish, said Yahoo's consolidation in and of itself gives marketers more incentive to buy Yahoo's inventory and use its buying tools, like the new Yahoo Ad Manager.
He said he works with Yahoo frequently, and attended meetings at CES between the tech giant and several of his clients. To him, Yahoo Advertising is a smart effort by the company to leverage its premium display inventory and the consumer insights it gets from its significant, if not dominant, search engine. It can offer advertisers a unique package of the two, in the way that AOL has melded its premium content and video ad networks.
"If we’re able to leverage display to target someone who we know is showing intent on search, I do think that makes Yahoo a more compelling proposition," Stein said.
Stein agreed with Sacerdoti's assertion that Yahoo's adtech has fallen behind its peers, but said he sees the Yahoo Advertising announcement as an indication that the company intends to get serious about closing the gap.
"I really get the sense that they’ve been playing a little bit of catch-up on defense since Marissa [Mayer] came on board, but now it seems they have the vision set up," Stein said. "The thing is that this is the announcement, so I guess we’ll see how much of the technology is there already, and how much is being built."
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