When we look back at 2007 the biggest story, technology wise, will probably be iPhone Review but … a story almost as significant will go almost unnoticed - a leapfrog effort by Yahoo! Advertising to create truly online customized ads based on behavioral targeting …… happened almost as the same moment, according to a story in the New York Times.

"…The product, Yahoo SmartAds, would help marketers create custom advertisements on the fly, using information on individual buyers and information on real prices and availability from the vendors. For example, a person who had recently searched for information about blenders might see an ad from Target that gives the prices for the blenders that are on the shelves in the store closest to that person’s home."

"…The technology will also be applied for free across advertisements bought on Right Media, the online ad exchange that Yahoo purchased this spring (although the deal is still pending). The new feature may give Right Media a competitive advantage over other exchanges — like a new one created by DoubleClick, the online company that Google agreed to purchase for $3.1 billion in April. (The Google-DoubleClick merger is pending an antitrust review by the Federal Trade Commission).

Having a job at Right Media before they got bought by Yahoo! would be a smart move - anyone there is going to do well, from the sounds of it.  Second, web advertising is going though another stage were we're moving away from purely textual, keyword based targeting to behavioral and demographic (geodemographic) profiling and that has profound implications for Google as it may not share the same level of advantage that it has over Organic and Paid Search today.

"…“This fills a need that some advertisers have needed for a while — applying personalization to display ads, so they work like search and listing ads,” Mr. Kenny said. “Yahoo has a real advantage in SmartAds because of the data from their big and engaged audience, the combination of deep display and improving search capabilities, and the new changes to work with us at the technology level instead of just selling inventory.”

SearchEngineLand mentions another fact about SmartAds -

"…Microsoft currently offers geographic, demographic and behavioral targeting, but the "creative assembly platform" component of Yahoo SmartAds is unique. Google offers various targeting options, though not behavioral targeting currently. However, through search personalization and other efforts, it can reasonably be expected that Google will eventually introduce some form of behavioral targeting"

I'm sure Google will pull something out of Google Labs soon, but the question is now… will Google remain the leader here?  Perhaps not.

Still, it might not be till Fall that anyone besides a couple of big Airlines will be able to use Yahoo SmartAds.    I think some of the sites I have as clients, particularly the house plans, Architects would benefit from this kind of advertising … mainly because we've done the research on who buys, what demographic, but we had no good way to really target outside of Microsoft AdCenter - which hasn't got much marketshare as of yet.

Another thing we're seeing is the easiest service to use, the easiest, clearest and fastest interface, is the winner - over and over again.  For Search Engines, Google had that for the last 10 years.  No matter what anyone threw up, Google could do it faster and cheaper and usually, better.

As time goes on, it becomes harder to stay ahead, partly due to the it's size, Google is maturing as corporation, perhaps morphing in a Microsoft (one of these days … who knows?) and as that happens, it can't react quite as quickly or turn on a dime, like it did before.   In this case, Yahoo SmartAds might have the superior interface (for now) and Google may not be able to put something up that's just as good.   We'll see.