Adobe and Yahoo put online ads into documents

Yahoo (YHOO) is beginning to publicly test a new type of online advertising it hopes will prompt publishers of newspapers, magazines and newsletters to let readers freely access their digital archives. As part of a fledgling partnership the company is announcing today with Adobe Systems (ADBE), Yahoo can now make its contextual text ads appear alongside Adobe PDF documents in a format similar to a search engine.

It’s an interesting concept — but it’s not likely to give either company the kind of boost it needs online.

Under the program, “Ads for Adobe PDF powered by Yahoo,” publishers can choose to have their PDF documents matched with ads from Yahoo’s network. The ads will appear only when the documents are viewed on an Internet-connected computer, and they will reside in a side panel away from the content. Publishers that have agreed to test the program include IDG InfoWorld, Wired, Pearson’s Education, Meredith Corporation and Reed Elsevier.

We’ve been here before. Two years ago, a few companies with names like ReadNotify, Remote Approach and PDFtracker launched services designed to either monitor who was reading PDFs, or to track the ads placed in them. The concept didn’t seem to take off.

And even if the more sophisticated technology from Yahoo and Adobe fares better than those companies did, this program isn’t going to help either company tackle its biggest online challenges: It’s got going to allow Yahoo to catch up to Google (GOOG) in online advertising anytime soon, and it’s not going to help Adobe drive sales of its most popular online tools.

A peek at Adobe Photoshop Express (Photos 1/6)

Based on the briefing I got on the service, and what I can gather about the program, there are a couple of significant issues that could keep it from generating much money in the foreseeable future.

First, neither company was able to give me even a rough estimate of how many PDF pages out there are good candidates for the program. (One billion? Ten?) Many PDF pages are generated not for pleasure reading but for official uses — government-mandated documentation, for example. Those don’t lend themselves to ads.

Second, neither Adobe nor Yahoo would give me a clear sense of whether their tests show that people actually click on ads in PDFs. They said they expect people will click on PDF ads somewhat less often than they click on in-browser ads. Also, it doesn’t help that advertisers will have little control over what kinds of PDFs their ads appear in, and publishers will have little control over what kinds of ads show up in their PDFs. (It’s not difficult to imagine inappropriate ads appearing in a Little League newsletter.)

Google’s YouTube video ads: How they work: Photos (1/9)

Third, and perhaps most important, ad-enabling a PDF is a somewhat cumbersome process at this stage. To get Yahoo ads onto a PDF, publishers have to sign up for an account with Adobe, and then upload their PDF files to an Adobe server. Adobe will then e-mail back an ad-enabled version of the document. This is fine for lightweight PDFs of 5 megabytes or less – but publishers who want to experiment with ad-enabling an entire newspaper or an issue of a magazine will find it too unwieldy. Adobe and Yahoo told me they’re working on a process that’s friendlier to large publishers.

Since this is still in its early stages, we’ll have to cut Adobe and Yahoo some slack as they figure things out. And the fact that they have some major publishers signed onto the program might help them develop the product more quickly.

Said Todd Teresi, senior vice president of the Yahoo Publisher Network: “We are optimistic that because of the type of content that will be available, our advertisers are going to get a very strong experience similar to what they expect when they’re in similar environments on the Web.”