Yahoo Expands Search-Ads Relationship With Chitika Into Mobile

Yahoo has apparently been working with search-ads network Chitika since 2006. Chitika ads appear on various Yahoo PC sites (e.g., Answers, Local) and Yahoo (Bing) search/text ads are syndicated across Chitika’s network of roughly 250,000 publisher sites. Now that relationship is expanding to mobile.

According to the news out this morning:

The multi-faceted agreement with Yahoo! includes; off–network search syndication, monetization of Yahoo! owned and operated properties, and mobile ad serving and monetization. This deal allows Chitika to continue to provide world-class monetization solutions to its partners and helps Yahoo! extend its search marketplace.

What this means as a practical matter is the following:

• Off-network: Yahoo will “re-syndicate” search ads across the Chitika network in mobile (mirroring the distribution Chitika provides for Yahoo on the PC)
• In-network: Yahoo will use Chitika technology to serve and target search ads on its own mobile properties

The deal is a mix of licensing and revenue sharing.

I spoke yesterday with Chitika CEO Venkat Kolluri who was obviously enthusiastic about the expansion of his company’s deal with Yahoo. He discussed the challenges of translating search/text ads into effective mobile ads — essentially mobile display ads. Google also does this with mixed success.

Kolluri said the objective was to minimize or eliminate bad clicks in mobile. Chitika has apparently done this by generating ad-category icons and putting the text ad copy on a landing page.

The search marketer doesn’t get charged for the first click on the icon; the billable event happens when a user clicks on the link/text on the mobile landing page (there’s no click-to-call currently). Google and others have also addressed this “inadvertent click” issue, sometimes called the “fat finger” problem in different ways.

Below is an example of how these ads/icons appear in a mobile context. The screenshot was provided by Chitika:

This deal is noteworthy in a few respects. It reflects another semi-independent move by Yahoo to reap more revenue from search advertising. However, it also benefits Bing search advertisers because they gain additional mobile reach (it’s not clear how or whether Yahoo and Microsoft will communicate about this network syndication to advertisers).

The deal is also part of Yahoo’s new much more aggressive mobile strategy.