Yahoo's CEO discusses reducing the friction between advertisers and publishers, and how his company plans to innovate on the audience experience.

At the Interactive Advertising Bureau's first off-site annual meeting, Yahoo's CEO Jerry Yang and President Susan Decker spoke to a packed house, addressing both the 800-pound Microsoft gorilla and Yahoo's plans to help the industry come together in terms of media and advertising.

Yang began his presentation by reflecting on the term "ecosystem," saying it is something he has long used to describe how industry gets built.

"I view it as a stronger system of audience and users interacting with advertisers in a network," he said. "Yahoo's strength is to be part of what advertisers and publishers are trying to do." 

Yang described Yahoo's current position as a relationship with top advertisers in the world that will grow as we look at how marketers can use their dollars more efficiently.

"The theme you will hear is how to better drive experience for users and advertisers," he said. "We hear a lot about how we can take the friction out. We are doing a lot on both sides."

What it means to be Yahoo
Yang said it is his company's major mission right now to continue to innovate on audience experience by anticipating what consumers want. "Personalization and openness, as well as relevance, are what we're focused on," he said.

For Yahoo, the starting points for this innovation are the Yahoo homepage, Yahoo Mail, Yahoo Search and Yahoo's Mobile Developers Platform. By developing leadership positions in key verticals such as sports, news and financial, the company intends to build on those starting points.

But how does Yahoo intend to build business for advertisers and still retain consumer relationships in the face of audience and media fragmentation? Yang credits two driving points: pushing on openness -- through developers and on emerging platforms like mobile -- and tapping into the social aspect of media.

"We think social phenomenon is still at the beginning," he said. "We're starting to focus on making it a Yahoo experience."

Climbing toward digital's APEX
Yang then introduced a key initiative in Yahoo's strategy: "The advertising side, I think, is going through the most change. But to me… it's still about engagement and relationships. We have to continue to elevate the industry's dialogue; what it means to build a relationship."

To this end, Yang said that Yahoo is undertaking a new platform strategy to power both aspects of this ecosystem.

Susan Decker joined the conversation to elaborate on the new platform, which she termed "APEX," or the advertiser and publisher exchange.

What Yahoo is intensely focused on -- on the publisher side -- is how to make the process simpler, not just for engaging with Yahoo, but for engaging with each other as well, Decker said.

"Yahoo recognizes the high complexity, the need for a platform underneath power and transparency," Decker said. "We are building a cutting-edge ad platform that runs across all formats (search, display, mobile and more) all in one easy-to-use system. We are trying to revolutionize the online ad industry by trying to take the headaches out of the process today."

Decker described the legacy systems of marketing as being based on internally managed IT systems and said that, in contrast, the new ecosystem will leverage the power of participants in a native, web-based way. "Like what the DVR industry did to the TV industry," she said.
 
For the publisher, Decker says this means being able to distribute and target campaigns across other publishers' sites, communicating with like audiences as well as with a site's own audience. Yahoo's new systems should allow [publishers] to package, sell and distribute across other sites, and Decker hopes the efforts should take the complexity out of ad serving and targeting.

In her words, "Yahoo will make ad operations sexy."

On the agency side, the new platform aims to streamline the buying process, while existing ad networks will be able to connect to publishers with a broader array of advertisers. Decker said the new platform increases the ability to focus on creative and on reaching the right person at the right time.

"You will be able to focus on the more fun parts of the business," she said. "This will help us all get to the next level of engagement and leverage the real power of the internet."

The big question, answered?
Obviously, much of the excitement surrounding Yang's appearance at the conference focused on what his perspective would be on the potential Microsoft acquisition.
 
Yang described the furor surrounding the bid for Yahoo as a galvanizing event for everyone at the company, himself included. "We are very focused on looking at the proposal from Microsoft; we're spending time to understand all our alternatives," he said. "Whatever the outcome, Yahoo's direction is my No. 1 job, so it's a great time to talk about the industry issues we're discussing here today."

Yang closed the presentation with optimism for his company and its role in online advertising. "I hope the dream we had 13 years ago comes true, that the web will be the premier industry for advertisers."

Jodi Harris is managing editor at iMedia Connection. Read full bio.