Yahoo today announced that it has fully acquired Right Media, expanding on the 20% stake they've held since October. Right Media is an ad exchange, rather than a standard ad network, which facilitates transactions between publishers and advertisers, auction-style and in real time.
Forrester's Charlene Li asserts that this is a "smart move" by Yahoo:
While this looks like a defensive move against Google's Doubleclick acquisition, as I note above, this expansion has been in the works for the past year. Depending on your perspective, I think it's actually an offensive strategy for Yahoo! to build on its dominance in the graphical ad marketplace.
According to their press release, Yahoo sees exchanges as a key element in the online advertising ecosystem, and views this acquisition as the differentiator that puts them at the front of the pack - especially with all the talk about monetizing all the user-generated content out there.
More from the press release...
Right Media's open exchange will facilitate a frictionless model where buyers have equal opportunity to engage with the largest, most valuable audiences and to extract the maximum value from their campaigns and sellers can access an enormous pool of advertisers and foster competition for their inventory to maximize revenue. Yahoo! will increase its participation in the Right Media Exchange both as a buyer and seller to help increase liquidity in the exchange while empowering publishers and advertisers to generate more value for themselves within this vibrant marketplace.
An open exchange will provide tremendous opportunity for advertisers, publishers, advertising networks, and for Yahoo!:
-- Advertisers will have greater inventory and audience options from Yahoo! and other participants in this exchange, as well as increased control and visibility into the buying process.
-- Publishers will be able to bundle their own ad inventory with Yahoo!'s inventory and the exchange's inventory - thereby boosting demand and generating the highest returns for each ad placement.
-- Advertising networks will reap the same benefits as advertisers and publishers, and additionally, the exchange will benefit those ad networks with unique value propositions, giving them an opportunity to compete with the largest players, thanks to reduced friction and increased transparency.
-- For Yahoo!, this more open approach will allow the company to increase liquidity, allow advertisers to more efficiently ascertain the true value of display ad inventory, and generate greater returns for Yahoo!'s own display inventory. It will give Yahoo! a new channel and inventory for excess demand and provide an opportunity to derive more value from non-premium inventory.
As the largest online publisher and one of the leading ad networks, Yahoo! can help drive additional participation in Right Media's open exchange and ensure a level playing field for all parties.