Driving Smarter Outcomes: How Predictive Audiences Are Powering the Next Era of Performance Advertising

In today’s high-stakes digital landscape, performance advertisers are under more pressure than ever to deliver measurable outcomes—whether it’s app downloads, lead submissions, or purchases. While tools like remarketing and lookalike modeling are still valuable, they are inherently reactive, built on past behaviors that don’t always reflect future intent.

The reality? These tactics often struggle to scale efficiently, especially when success is measured in cost-per-action (CPA), return on ad spend (ROAS), or customer acquisition.

The Challenge: Reaching the users ready to convert

For performance marketers, the challenge lies in efficiently identifying and reaching users most likely to take action without wasting impressions or inflating costs.

Retargeting helps re-engage users who’ve shown intent. Lookalikes allow you to reach new users who might  behave similarly to converters. But both are tethered to what users have already done.

What if you could shift from reacting to predicting?

The Solution: Yahoo Predictive Audiences

Yahoo DSP is addressing this challenge head-on with Predictive Audiences, powered by Yahoo Blueprint Performance, our AI engine that guides performance. It’s a forward-looking solution that helps advertisers target users based on their likelihood to convert, not just their browsing history.

Advertisers start by uploading a seed audience in Yahoo DSP—users who have completed a desired action (like a purchase or form fill). Based on that seed audience, Yahoo DSP builds a model using top-correlated data points and scores every Yahoo user based on their predicted likelihood to convert. Users are then grouped into eight conversion tiers, ranging from high-intent to broader exploratory tiers, based on the likelihood of each user taking the desired action. Finally, for each bid request, Yahoo DSP checks whether each user belongs to one of the active predictive tiers, by prioritizing impressions for those users “likely to convert.” 

This real-time intelligence enables advertisers to scale reach without sacrificing precision, unlocking true performance.
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The true differentiator of Yahoo Predictive Audiences

 What sets Yahoo Predictive Audiences apart as a powerful targeting strategy that drives action is the following:

• Data-Rich Intelligence: Yahoo Predictive Audiences derive insights from a rich ecosystem of signals, including, Yahoo web properties, Mobile apps, ad serving data, demographics and geographic indicators. Built on insights from 637M+¹ global users, 1M+² behavioral and contextual signals, and 200B³ daily impressions, the model captures real-time intent at scale—far beyond what traditional lookalikes or retargeting can offer. 
• ‍Conversion-Focused Modeling: Rather than guessing based on past behavior, Predictive Audiences score each user on their future likelihood to convert—whether that’s a purchase, form fill, or app install. That means your media dollars go further, targeting users with true performance potential.‍
• Precision Meets Scale: The eight-tiered model gives advertisers the flexibility to dial in on high-intent users or scale up by expanding to broader tiers—all while maintaining control over frequency and bid strategy.‍
• Always-On Optimization: As campaign data flows in, the system continuously updates predictions—adapting to changing user behavior and improving audience quality over time with each and every impression.‍
• Omnichannel Reach: Predictive Audiences are available across display, video, native, and mobile formats—ensuring a consistent user journey across devices and touchpoints.

Real Results from Predictive Performance

Yahoo DSP advertisers who have activated Predictive Audiences are seeing remarkable performance improvements across the board. On average, they’re achieving a 93% lower cost per acquisition (CPA)⁴ compared to campaigns using third-party audience segments while driving increased conversion velocity by targeting users who are more likely to take action in the near term. This not only improves campaign efficiency but also ensures better budget utilization, as advertisers can avoid spending on low-propensity users and instead focus bidding efforts where they're most likely to drive results.

The Bottom Line

Yahoo Predictive Audiences represent a new era of performance advertising—one where machine learning enables smarter targeting, better outcomes, and more efficient spend.

With Yahoo DSP’s robust data foundation and advanced modeling, advertisers can move beyond guesswork and toward campaigns that truly convert.

Ready to rethink your performance strategy? Start predicting, not just retargeting.

 ^1-3 Yahoo DSP, Internal data, 2025
⁴ Yahoo DSP, Internal data, from all campaigns run in the DSP in 2024