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Yahoo's AMP: Panama or Panacea?

Published: April 7, 2008

Author: David Rodnitzky

SearchQuant posted a good analysis of AMP – Yahoo’s new display ad exchange – on his blog this evening, and he included a link to Yahoo’s promotional video about the release. Basically, AMP is an ad exchange that combines the inventory of Yahoo, major newspapers, eBay, and several other big players into one place. On top of that, it promises a slick user interface, and targeting tools like geo-targeting and demographic targeting.

As SearchQuant and others have noted, the announcement of this exchange – which won’t launch until Q3 – seems to be closely connected to the recent threats by Microsoft to withdraw it’s acquisition bid of Yahoo. An alternative reason could also be the recent EU approval of Google’s acquisition of DoubleClick, which Google has acquired to create their own ad exchange. Announcing AMP today could cause potential partners for Google’s ad exchange to take a wait and see approach, preventing Google from locking up the market before AMP is ready.

Having watched the promotional video for AMP, and having experienced the many delays and eventual disappointment over the release of Panama – Yahoo’s search marketing platform – my perspective is one of hope but also skepticism. On the one hand, I do think that an ad exchange is a perfect fit for Yahoo, for several reasons. First, Yahoo has always been strong in display media. Second, Yahoo recently acquired Right Media and Blue Lithium, two big players in the world of networks and exchanges. And third, many publishers (in particular newspapers and traditional media outlets) are afraid of Google’s aggressiveness and would love nothing more than to see a legitimate competitor to the Google-DoubleClick juggernaut.

So if AMP really works the way the video suggests it will work, and if it is delivered on time, and if it signs up the partners it is claiming to sign up, this could be a really great thing for Yahoo, as well as for media buyers. But note the number of “ifs” in that last sentence. It’s easy to create a slick video filled with promises of revolutionizing ad buying as we know it. Indeed, the buzz about Panama in the early days was that it would be as good (and perhaps better) than Google’s AdWords platform. Once Panama was released, however, the enthusiasm diminished. Granted it was better than the legacy Overture platform, but it wasn’t anywhere near Google AdWords.

As I always advice clients who are looking at bid management software, ‘anyone can create a PowerPoint that claims that their bid management software will grow your profits by thousands of dollars a year, but the distance between a good PowerPoint and good bid management software tool is pretty great.’ And in Yahoo’s case, creating a pretty video six months before the scheduled launch date of the product is about as reliable as a good PowerPoint. Don’t get me wrong, I’d love to see AMP work (hey, I am a YHOO stockholder, I am sometimes embarrassed to admit), but if past performance is any indication of future performance, don’t bet the farm on a Q3 ad revolution just yet.

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