Tuesday, February 20, 2007

Yahoo's Rich Media SNAFU

According to this story (registration required to view), PointRoll has written to its clients stating that Yahoo is going to make an effort to enforce their policy of charging fees for third-party rich media placements.

Yahoo have apparently pulled the PointRoll rich media ads of some clients and replaced them with standard ads. It appears the real reason behind the move is to try to migrate advertisers to use of rich media solutions from AdInterax, a company Yahoo acquired in the fall, and for use of which Yahoo would waive the fees (since AdInterax is not a third-party to Yahoo). PointRoll, who claim to have 70% of the rich media market, is a direct competitor of AdInterax.

If I'm a Yahoo media rep, I can't be too happy with having to field numerous phone calls and emails this morning from media-buying clients asking for makegoods on what's been switched out, and a bonus to salve hurt feelings. Yahoo might be an 800-pound gorilla, but it's a huge jungle out there, and Yahoo is already seen as a stumbling giant anyway. There are too many other online media vehicles out there for significant advertisers to cave to Yahoo on this.

On the other hand, there's no word in the story on whom the affected clients were, and that is a very large question. I have trouble envisioning Yahoo putting their foot down with their biggest advertisers (such as automotives, financials and the biggest direct advertisers) or their most coveted advertisers (such as CPGs) very hard. Would Yahoo risk ticking off an eight-figure spender just to try to strong-arm them into migrating their rich media technology to AdInterax? I doubt that.

I don't see Yahoo's strategy here succeeding for very long. Online media is a fluid commodity that is highly subject to the vagaries of supply and demand. If Yahoo loses business over this, the strategy will go bye-bye.

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