Although Yahoo, Microsoft, and AOL compete with each other for advertising dollars, the three technology companies have agreed to start selling some of each other’s ad inventory. During a Tuesday evening dinner in Manhattan, executives from the three companies announced a new partnership to ad buyers and publishers. The executives are hopeful that the idea, which is rooted in Yahoo’s recent acquisition of the company 5 to 1, will help the three companies collectively recapture market share that they have lost to Facebook and Google.
Although each of the companies will continue to sell their own display inventory, they will now sell each other’s “Class 2 Display Inventory” as well. This type of inventory refers to the display ad inventory the companies cannot sell and would normally hand over to ad networks.
Instead of selling “left-over” display advertising inventory to ad networks, Yahoo, Microsoft, and AOL will now sell the remaining inventory to each other. For example, if Yahoo has a large order for ad impressions, Yahoo would first fill the order with their own ad inventory. However, if Yahoo is unable to complete the order with their own ad inventory, they will fill the remainder of the order with the “Class 2 Inventory” of AOL and Microsoft.
In the past, the remaining impressions were turned over to a third-party ad network that filled the order. The rival companies are planning to share the revenue that the new program will generate and are hopeful the new partnership will produce more revenue than the previous system.
The cross-selling of ads should be active by late this year. The partnership will not require the companies to enter an exclusivity agreement or prevent any party from working with other companies.
[Sources Include: All Things D, 5 to 1, WSJ]
