Over the years many studies have been conducted by companies such as Microsoft, Yahoo!, SEM companies and Ad Networks into the performance of different online ad campaigns and they have revealed that they are more successful when display and search campaigns are run alongside each other.

During the recession, display advertising has taken a bit of a battering, as it is does not have the best reputation for being the most effective or productive online advertising platform, especially when compared to the search network.

Taking this into consideration, Yahoo! has recently declared that it has been using search queries to influence which display ads are shown to users, in an attempt to increase the currently quite disappointing performance metrics.

Due to the bad perception advertisers have of display ads a lot of investigation has taken place to try and use behavioural targeting to try and boost performance figures and therefore revive display advertising as an efficient advertising medium.

Yahoo! believes strongly in the idea of behavioural targeting and argues that it has begun to see an enhanced performance in its display advertising campaigns due to it’s new SmartAds technology, more to the standard of the acclaimed search campaigns.

Last week Yahoo! introduced it’s new SmartAd’s platform, that was originally launched in 2007 and allows advertisers to implement dynamic targeting. This means that advertisers can show different variations of ads, such as different images, colours and messages, depending on the age / sex of the user viewing the advert.

The new SmartAd platform allows advertisers to combine different elements of different ads to customise each one to the foreseen taste of each prospective client and therefore make it more likely that it will catch their eye and that they will click on the ad.

The new program combines Yahoo!’s reach and user knowledge with the innovative ad-serving technology of third-party providers to deliver these smart ads on a large scale across both PC and Mobile networks.

Yahoo! claim to have used the vast amounts of data that they have collected from their 150 million users and 43 billion minutes of site usage from the past month to investigate user behaviour.

Using this knowledge Yahoo! SmartAds claims to combine tag-lines, offers, images, logos and colours, that have been previously agreed with the advertiser, to create the ideal ad for the user in question.

This means that a 43-year-old man that has been conducting searches about finance, for example, will see a very different ad than a 32-year-old women that has searched from a particular musician for instance. See here for examples.

Since the launch, this new technology has allowed most Yahoo! advertisers to see an obvious improvement in performance metrics such as clicks, conversions and overall ROI and according to Yahoo!’s vice-president and general manager of display advertising, David Zinman, it’s like they have “put performance marketing on steroids.”

While the idea of behavioural targeting may encounter some privacy issues, it is a very exciting concept and one that may help shape the future of online and mobile display advertising.

However, whether or not this platform of advertising will be able to perform as well as campaigns running on the Search Network is another matter. We’ll have to watch this space…