For Yahoo, people's online social connections are not very effective for targeting ads, when compared with better "signals" like search queries, location information, stated interests and content viewed, according to a Yahoo vice president.
Although social networking has become immensely popular and Yahoo has a massive "social graph" of connections in products like Mail and Messenger, "it's proved to be a relatively weak signal for [ad] targeting," said Scott Burke, Yahoo's vice president for user data and analytics.
By comparison, search queries reveal valuable user intent, especially when in a shopping mode, and that information, as has been broadly proven for years, leads to very useful targeting of ads, he said, answering questions from a financial analyst at the Pacific Crest Technology Leadership Forum Conference on Tuesday.
It's also very useful to know a user's geographic location, because then Yahoo can serve local content like news and weather, as well as local ads, Burke said.
Ads can also be finely paired up with services like fantasy sports and with content such as news articles and user-generated material, which is why Yahoo agreed to acquire Associated Content, with its more than 350,000 freelance contributors, he said.
Search queries, location, content and online services "have proven so far to be much stronger signals that lead to a difference in behavior in advertising performance," he said.
That's not to say Yahoo isn't interested in social networking and social media. The huge interest in those areas means Yahoo has to participate if it wants to be the center of people's online lives. That's why it has integrated its services with Facebook, so that Yahoo users can access their Facebook accounts from within services like Yahoo Mail, he said.
Yahoo wants to go beyond simply aggregating people's social-networking activities and try to provide added value to those "social streams," by providing links to pictures, videos and news articles related to an item in a person's social feed, for example. That's beyond the scope of social-networking sites that don't provide the amount of media content Yahoo does, according to Burke.
"Yahoo is trying to commoditize this stream of information and make it into a channel both for consumers and advertisers who can then come to Yahoo and get access to syndicated ads across multiple social networks, whereas they can't go to Facebook today to run an ad campaign across Facebook and Twitter," he said.
"That's the kind of role Yahoo can play at the centerpoint of the social space. So for us, the data is a lot more about building these consumer engagement features that keep people coming back to Yahoo and participating with Yahoo, and secondarily about making that connection to the advertiser so that they get a trusted partner," he added.
Regarding the balance between ad targeting and user privacy, Burke said Yahoo is quick to anonymize a lot of user data because it can target its ads using categorized and aggregated usage information.