The Art and Science of Advertising

Key Scientific Challenges Blog Series, Entry # 4:

Late January, we announced the kick-off of our 2010 Key Scientific Challenges Program, what we hope is a thought-provoking series of guest blog posts here on Yodel Anecdotal that offer a quick overview of these scientific challenge areas. Check out our last post on microeconomics and social systems.

Today, we cover advertising, which is yet another important topic related to the Web. We’ve recruited Vanja Josifovski from Yahoo! Labs to give you a glimpse of how significant advertising is to the online world.

If you’ve seen Mad Men, you’ll know what it’s like to develop an infatuation with the 1960s advertising world – the fashion, the glamour, the old technology. While we’ve come a long way since then, advertising continues to remain a large part of our daily lives and a permanent fixture of our online experience. Here at Yahoo!, we have a special appreciation for the undercurrents of online advertising because it supports a large swath of the Internet ecosystem.

Generally, web advertising closely follows the same two major models of traditional advertising.

First, there is direct advertising, which simply means that the goal of the ad is to get a direct response from the viewer. A good example is sponsored search where ads are shown beside a search result. The most difficult thing with this type of advertising is making sure the ads are relevant. If you searched for the word puzzle – did you mean jigsaw, crossword or Legos? These are complex issues we have spent a lot of time thinking about – and not in the Mad-Men-sit-back-with-whiskey way, but more of a microeconomics, super-computing way.

And then there is brand advertising, which aims to create a favorable impression about a brand or a product. In this construct, ads are usually served up by graphical means, in what we call display ads on web pages. The challenge is matching the placement/context of the ad with behavior of the viewer, both of which also introduce a stunning number of variables and data points.

In both modes – search and display – some complex learning algorithms are needed to provide relevant ads to a user. In a nutshell, it is this problem of relevance that makes advertising one of our Key Scientific Challenges. And it’s also central to the somewhat newer concept of computational advertising — a scientific discipline we developed at Yahoo! Labs that aims to formalize the problem of finding the best ad for a given user in a given context.

It sounds logical enough, right? Can we really build a system that serves the most relevant ad to a user every single time? Can we bring advertising into the realm of the other “computational” sciences? Well, we think so and we’re working hard to tackle that kind of personal relevance. It’s simply going to take some hard core science, some persistence, and continued sharp thinking and hopefully more programs like those at universities (Stanford has a leg up) and our own Key Scientific Challenges to crack it.

Vanja Josifovski
Yahoo! Labs

P.S. If you’re curious about just how big a deal Computational Advertising is, one of Yahoo!’s foremost experts in the field, Andrei Broder, was just elected to the National Academy Engineering. That’s pretty good testimony that advertising is a little bit art AND science.

This week at the University of Washington we are thrilled to be kicking off the second half of the 2009-2010 Hack U™ season. The University of Washington hack will be followed by events at Georgia Tech, UT Austin and UC San Diego throughout March and April.

During each of these hack events, Yahoo! developers teach passionate CS, HCI and engineering students about the latest and greatest open tools and technologies and web programming tips in a series of tech talks, then spend 24 hours with them to help them build their dream hack for the competition held at the end of the week. In true Yahoo! style, the all night contest is filled with fun, free food, schwag, prizes, Wii games and plenty of caffeine!

At the end of the season, the winners from each university will be flown by Yahoo! to our University Hack Showdown, which is normally held in conjunction with Yahoo!’s Open Hack Day, where they will hack it out for street cred, cool prizes and the opportunity to get their hack noticed by web industry judges, including VCs, web entrepreneurs, Yahoo! execs and technology gurus.

“The close of 2009 marked the third year of the Hack U™ program and it’s been amazing to watch the innovation, spirit and quality of the hacks continue to grow, said Jamie Lockwood, program manager for Hack U™. “The students used to just mash up as many open technologies as they could barely thinking about UI or what problem the hack solves, but today we see ideas and prototypes coming together that are more and more sophisticated and in some cases almost ready to go to market.”

The winning Hack U™ students from last season had no problem holding their own against the experienced developers that showed up at the Yahoo! Open Hack event in NYC, winning half of the categories including best overall hack.

The program has definitely caught the attention of Yahoo!’s internal open tech leaders, as well as the external web community. The Hack U™ winners from Toronto even snagged an interview at Y Combinator with their hack idea.

You can read more about the program and view some of the other hacks that have been developed at universities across the country and the world (we had our first India Hack U event at IIT earlier this year!) on the Yahoo! Developer Network site.

Hack U events have been held at some of the best engineering universities around the country including UC Berkeley, Stanford, Georgia Tech, Carnegie Mellon, University of Washington and University of Illinois and we’re always on the lookout for other universities that want to be part of the growing Hack U community We also want to keep the technology topics fresh, timely and up to speed with the latest web industry innovations so feel free to send us requests for specific speakers or ideas for suggested topics.

Check out the website for more information, updates and details about the upcoming 2010 schedule.

– Yahoo! Academic Relations and Hack U™ Team

We all know that the Web makes the world a much smaller place, and we have some great news to share today that will make your Web world smaller and easier, while at the same time expanding your social world online! We’re partnering with Twitter to integrate their real-time social experience into our global network.

What does this mean for you? Very soon, you will be able to see your Twitter feed on Yahoo! just as easily as you use Yahoo! to consume all of the other great content you love from across the Web. Through today’s partnership, along with our recently announced Facebook relationship, Yahoo! is giving your online social life wings to help you stay in touch with the people and things you care about most across the Web. It’s part of our strategy to ensure that Yahoo! delivers the people and things that matter most to you!

Want to see your friends’ latest Twitter posts? Or update your Twitter feed with stories and content from Yahoo!? Or check out trending topics and public updates? You no longer need to stop what you’re doing to see what’s going on with your Twitterverse — you’ll be able to do it all from Yahoo!.

As part of Yahoo!’s Open Strategy (Y!OS) to make the Web more open and relevant, we’re helping you zero in on what’s important to you:

• Coming Soon: Read your personal Twitter feeds directly from Yahoo!’s many products and properties, including the homepage, Yahoo! Mail, Yahoo! Sports, and others — anywhere you can see Yahoo! Updates across our network.
• Coming Soon: Update your Twitter status and share content from Yahoo! in your Twitter stream — we’ve made it even easier to share what’s going on with your friends and followers on Yahoo! and Twitter.
• Coming Soon: Whenever you produce social actions on any website (like comments on articles, ratings, buzzes on Yahoo! Buzz) that you’ve allowed to appear on Yahoo! Updates, those actions can also be shared automatically with your friends on Twitter. (Pssst: Publishers and developers interested in learning more about Yahoo! Updates, including publishing directly into it or using Yahoo! Buzz or the Yahoo! Application Platform as ways of driving social traffic to your site, look here , here and here.
• Coming Soon: Yahoo! media properties like News, Finance, Entertainment, and Sports will include real-time public Twitter updates, allowing you to get a quick pulse-check on topics, trending and otherwise.
• Available Today: Yahoo! Search users will immediately see real-time Twitter results starting today.

The real-time Search integration is available immediately, with other features of the integration to be launched later this year. Go on, give it a test flight: Go to Yahoo! Search to check out how we just made your Web world smaller, yet larger at the same time.

Bryan Lamkin
SVP, Consumer Products Group, Yahoo!

By Travis Reiman, Dean of Students at W.L. Henry Elementary School in Hillsboro, OR

Editor’s Note: Each month, Yahoo! for Good unleashes Purple Acts of Kindness to surprise and delight our local communities. In February, we brought extra cheer to classroom teachers in Hillsboro by delivering purple flowers and gift cards for Valentine’s Day arts and crafts projects. Here’s an account from their Dean of Students.

Last Thursday, the classroom teachers here at W.L. Henry Elementary School in Hillsboro, OR got a special surpise. As vases of beautiful purple flowers were delivered, there were plenty of smiles and lots of confused looks. Is my husband just trying to be sweet??? Did I finally win the lottery??? No one has ever sent me flowers before!!!

Everyone was shocked and excited when they discovered they were the beneficiaries of Yahoo!’s Purple Acts of Kindness Program. In addition to the bouquets, all 19 classroom teachers received $100  gift cards. The gift cards were meant to be used for the school’s Valentine’s Day celebrations so that students could have an extra special day.

This special gift was a great reward for all the hard work and effort W.L. Henry’s students put into learning this year. For the teachers, this opportunity to give their students an afternoon of special arts and crafts projects, candy, gifts, and fun put huge smiles on their faces. Thanks so much, Yahoo!.

Measuring the Unmeasurable

Key Scientific Challenges, Entry #3: Microeconomics and Social Systems

On January 27 we announced the kick-off of our 2010 Key Scientific Challenges Program.  To highlight the scientific challenge areas included in the program, we launched a series of guest blog posts earlier this month on Yodel Anecdotal. Read our previous post on privacy and security, “Data, Data Everywhere, but How to Keep it Safe.”

Another big challenge are Yahoo!’s research scientists are continually examining is microeconomics and social systems. In this entry, Sharad Goel from Yahoo! Labs shares some thoughts on how Yahoo! is tackling the new opportunities for research into the social sciences that the Web is making possible and why it’s a fascinating field.

What do your friends really know about you? How much do they influence your decisions? How often do we stray from the cultural herd? How do groups organize to solve complex problems?

Answers to such fundamental questions about social behavior have often eluded us. With microscopes we peered into the intangibly small building blocks of life, and with telescopes we found our place in an unimaginably expansive universe. But without the tools to faithfully document human activity—a challenge that by comparison seems so palpable—we had no way to investigate the inner workings of our own communities. Now with an explosion of information on every aspect of our everyday existence—from what we buy, to where we travel, to whom we know—we can measure what until quite recently was thought unmeasurable. In the Microeconomics and Social Systems Group at Yahoo! Labs, we are using this proliferation of data to explore how societies function. It’s a fascinating area of study that is just beginning to shed light on new layers of human behavior, making it a perfect fit for the Key Scientific Challenges Program.

In a recent study that’s garnered some attention, for example, we asked, “How eccentric are people?” Looking at consumer preferences across movies, music, and web browsing, we came to the surprising conclusion that ordinary people have pretty extraordinary tastes. In particular, we found that typical Netflix and Yahoo! Music users regularly watch movies and listen to songs that are not even available in the largest brick-and-mortar retailers. This result not only challenges stereotypes about people blindly following the herd, but also highlights the importance of offering consumers broad selection. That is, specialty products may dramatically boost user satisfaction by providing buyers the convenience of “one-stop shopping” for both their mainstream and niche interests.

In other work, we used web search queries to forecast the commercial success of movies, songs, and video games. Weeks, sometime even months, before a movie opens or a video game is released, one can find traces of pent up consumer demand in the search query logs. We found that these telltale signs of early interest are remarkably good predictors of future success. The catch? Although the search logs do reflect user intent, more mundane indicators, such as production budgets and reviewer ratings, perform equally well at forecasting sales. Thus, the benefit of web search as a prediction tool may have less to do with its superiority over other methods than with its generality, low cost, and real-time nature.

At a time when we are drowning in data, at Yahoo! Labs we’re asking a simple question: what can you do with it? The answer is limited only by our imaginations.

We just announced with Microsoft that we have reached clearance for our search agreement, without restrictions, from both the U.S. Department of Justice and the European Commission.  We’ll now turn our attention to beginning the process of implementing the deal.

Here are some useful links to get more detailed information about today’s developments:

Search Alliance Official Website

Official Press Release

Yahoo! Search Blog

YDN Blog

Yahoo! Search Marketing Blog

Yahoo! Transition Center

Video: Yahoo! CEO Carol Bartz discusses Yahoo! & Microsoft’s new Search Alliance: Click here

Video: Yahoo! CEO Carol Bartz talks about Yahoo’s continued innovation in search: Click here

Official US DOJ Antitrust Division statement: Click here

We will continue to update Yodel with new information today and throughout the process.

Dibble here…Jerry Yang, Scott Noteboom and I were joined by Governor Dave Heineman of Nebraska, Mayor Douglas Kindig of La Vista, Attorney General Jon Bruning and Nebraska Congressman Lee Terry, and hundreds of guests, as we celebrated the grand opening of Yahoo!’s new state-of-the-art data center in La Vista, Nebraska and our new sales and customer support center in Omaha. We are so grateful to the residents and local businesses in Nebraska with whom we could not have succeeded without their support.  Yahoo! serves billions of advertisements each day and services more than 600 million users from around the world each month and this data center is just one of many we’re building that will streamline our efficiency, while helping the planet. Yahoo! thanks Nebraska for being a part of the next phase of growth for the Internet.

David Dibble – EVP Service Engineering & Operations

Yahoo! Hong Kong conducted a survey to find out about consumer behavior and retail trends during Valentine’s Day. Incidentally, this year, the first day of Chinese New Year (CNY) also falls on 14 February. The last time these two occasions clashed was 57 years ago.

The survey was conducted with more than 1,000 respondents, 80% of which were born in the 70s or the 80s. 50% of them, who are either in a relationship or married said they will be celebrating the day with both their partner and family, while 34% chose to celebrate Valentine’s Day before or after 14 February.

Other interesting survey highlights include:

1.    52% of the respondents who have “someone special” in mind, said that they will not confess their love to that person on Valentine’s Day since it is also CNY and the “atmosphere and mood” is not quite right.

2.    Consumer confidence is growing steadily in Hong Kong and the survey shows that 66% plan to spend five to ten percent more for Valentine’s Day this year, or have the same budget as last year. 15% of the respondents plan to spend between US$250 – 650 on gifts for their partner.

3.    Nearly 50% of the female respondents prefer gifts that are more personalised, unique and practical. They also said that the most unwanted Valentine’s Day gifts include flowers, chocolates, soft toys, health and beauty products.

4.    About half of the respondents who are either in a relationship or married shared that they will use less gift packaging to be more environmentally friendly.

5.    20% of the male respondents would like to spend Valentine’s Day in ShenZhen, China while 20% of the female respondents wish to spend the day in Paris. None of the male respondents chose Paris as an option.

6.    80% of the respondents who are single revealed that they will use online match-making services like Yahoo! Personals to find a potential partner or to meet more people through social gatherings.

According to Lisa Tam, public relations manager of Yahoo! Hong Kong, VIP members of Yahoo! Personals are invited to send messages to other members in the hopes of finding someone special and stand to win prizes during this special festive season.

Internet users can also visit Yahoo! Hong Kong Auction site to purchase Valentine’s Day and CNY gifts for their loved ones.

For everyone interested in following excitement of the Winter Games that get underway today, Yahoo! makes it even easier for you to get all your information, even if you are on the go.  In addition to keeping fans on top of the action with a Games-dedicated website, today we’re launching a new Olympic mobile site at m.yahoo.com/olympics.

It’s the place to go when you’re out and about and want up-to-the-minute coverage on this year’s Games. You’ll get access to everything from live results, upcoming events, medal counts, and photos to news, expert commentary, and more—all from your phone. We’ve also integrated Olympics into our mobile search results, so you can easily find what you need fast.

So head over to the newly launched  Yahoo! Mobile Blog to get a preview video of the mobile Olympic experience and all of the other cool mobile things we are are doing at Yahoo!

The 2010 Winter Olympic Games kick off this week and like the King (aka, Elvis Presley) says, “I’m all shook up!”  The Winter Games are a special and emotional experience for me and I’m thrilled to be working with Yahoo! Sports in my home country to report first hand on all the action.

I’ve been skating since I was four years old and have experienced every Winter Olympics, either watching or competing, since that time.  I’ve had some incredible memories over the years, from winning my first Olympic medal at the 1994 games in Lillehammer and learning how to snowboard after competing at the 2002 games in Salt Lake.  But nothing beats that feeling of going to the Games to compete and stepping out on the ice for the first time.

I won’t be lacing up my skates in Vancouver but it’s going to be fun covering this year’s athletes as Yahoo! Sports Winter Games Analyst. I’m especially stoked about seeing up-and-comers like Kim Yu-Na from Korea, Evan Lysacek from the USA along with Mr. Comeback Evgeny Plushenko hit the ice for the individual figure skating events. But rest assured that I’ll make time to see some of my other favorite events like Short Track Speed Skating, Snowboarding and the Ski Jump.

Yahoo! is also letting fans get into the action by submitting their favorite winter sports photos in the “Winter Sports Moment” sweepstakes
at http://sports.yahoo.com/olympics/vancouver/fancouver. Fans get a chance to win prizes like digital cameras, and even a trip to the U.S.
Freestyle Skiing Championship in March. My colleagues and I are going to be covering all the events live from Vancouver over the next two weeks,
so keep checking back at Yahoo! Sports  for the latest and greatest news on the 2010 Winter Olympic Games.

Elvis Stojko

Yahoo! Sports Winter Games Analyst