Yahoo has new ad tool

NEW YORK (CNNMoney.com) -- Yahoo has introduced a new tool to help marketers create custom ads on the fly.

The advertising product, called SmartAds, allows advertisers and agencies to design a set of advertising components and artwork, then use Yahoo's SmartAds technology to automatically generate the hundreds - possibly thousands - of unique ad combinations based on those components, the company said in a press release Monday.

SmartAds will get different backgrounds, logos, and other features based on who is seeing the ad and what they are interested in, The New York Times reported.

SmartAds creates the customized ads in real-time based on a Web users' age, gender, location, and online activities, which the search engine hopes will offset slowing growth in display advertising, the paper reported.

Ads will appear on Yahoo's (Charts, Fortune 500) network of publisher sites, newspapers the company partners with, as well as its partners Comcast (Charts) and eBay (Charts, Fortune 500), and two of the three major airline companies which declined to be identified, the Times said.

"We do behavioral targeting now," Gaude Paez, a Yahoo spokeswoman, told the Times. "This makes display [advertising] more of a direct response vehicle than just branding."

Yahoo rivals are also upping the ante in the display advertising space as well. Google (Charts, Fortune 500) said it would buy online ad company DoubleClick for $3.1 billion and Microsoft (Charts, Fortune 500) agreed to buy Aquantive for $6 billion.