Yahoo to Test Search-Based Banner Ads

Updated: The company's search marketing division gets ready to display pay-per-click ads in a graphical format, joining its chief competitor Google in expanding the role of search advertising.

Google isnt alone in inching into the banner advertising space. Yahoo also is beginning to test new ad formats as part of its search marketing offerings.

A Yahoo Inc. spokeswoman confirmed this week that the companys search-marketing division, formerly known as Overture Services, plans to start testing graphical banner ads displayed based on their relevancy to a Web pages content in the next few weeks.

"Were always looking at ways of enhancing our services," Yahoo spokeswoman Gaude Paez said. "There are a number of things were looking at doing [in search advertising], including tests well begin for putting sponsored listings in a banner, graphical format."

The test will run on Yahoos network of sites, rather than on partner sites, she said. The ads will be dynamic, initially appearing as a banner ad and then transforming into a sponsored link.

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She declined to provide further details about Yahoos plans for the graphical, pay-per-click ads.

What about ads in RSS? Click here to read about Yahoos and Googles trials of feed advertising.

For its broad network of sites and services, Yahoo already sold banner ads and other formats to advertisers. But selling contextual banner ads would be a departure for its search marketing division. So far, that division has focused on selling text-based sponsored listings, which appear alongside search results or as contextual ads on content pages.

Last year, Google began selling banner-type ads when it launched its image ad program. This week, Google also made headlines when it added an animated graphical ad format and moved into offering site-targeted ads sold based on impressions rather than on clicks.

Read more here about Googles new CPM model for online ads.

Speculation also has grown in recent months that Yahoo will be expanding its search-advertising program for publishers. Yahoos sponsored listings currently appear on a limited number of other sites, but analysts expect the company to offer a broader program, similar to Googles self-service AdSense program, in which a wider variety of publishers can run Yahoos ads.

Editors Note: This story was updated with additional information about Yahoos testing plans.

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