APT (fka AMP, and before that, and APEX)  is getting its start with members of the Yahoo Newspaper Consortium, the company’s online ad sales alliance representing 779 newspapers from 32 publishers. As part the APT beta test this summer,  MediaNews Group’s The San Jose Mercury News and Hearst’s The San Francisco Chronicle were the first to try it, with the rest of the membership to be hooked up through the end of the year. APT will be made available to marketers, ad agencies, and ad networks at various points next year.

—Display game is Yahoo’s to lose: With APT, Yahoo is trying to do with display what Google (NSDQ: GOOG) has done with search ads, says UBS internet analyst Ben Schachter in a research note. Still, Google, Microsoft (NSDQ: MSFT), AOL (NYSE: TWX) and others are said to be prepping their own APT-like platforms. In the end, Schachter sees room for only one or two main winners in this game, writing: “Due to Yahoo’s scale and leadership position in display advertising, it is Yahoo’s position to lose. The problem is, given Yahoo’s execution history, we are concerned that they could lose it. This will all come down to execution; if Yahoo executes, the market opportunity could be significant.” After the press conference, I spoke with EVP Hilary Schneider and Mike Walrath, SVP, Yahoo Advertiser Marketplace Group, and asked how Yahoo expects to win.

—APT is the precursor: Schneider: “APT is really about the transformation of the display marketplace. Longer term, we see the opportunity for a converged marketplace. So with the introduction of APT, we’re taking the experience and capabilities that we have as being the world’s online publisher using that to solve the major pain points in the display marketplace. That’s a precursor to any future development. By spearheading that, and making advancements, that’s how we maintain our leadership.

—APT: How it works: Walrath: “Things that are not possible today—or at least incredibly difficult—APT makes seamless. A good example of this is when you think about the individual insights any given publisher might have about their local audience. Take a local newspaper. They have good insights into what its users do on their site. One person just visited the auto section. Here’s another user that just visited the sports section. The newspaper might be very interested to know that the second user may not have visited their auto section, but that they did a search on Yahoo for hybrid vehicles the day before. Up until this point, there’s been no way to connect that information effectively.”

—Display vs. search: Given that Yahoo is number two in search, it makes sense that it concentrate on display. But as a series of reports have shown, most recently TNS’ finding that display’s growth rates for H108 were cut in half versus H107, relying heavily on that ad format is becoming less remunerative. For one thing, marketers have tended to regard search as providing more detailed ROI, which becomes especially crucial in a down economy as ad budgets tighten. But Yahoo believes APT can tilt the balance back in favor of display. Walrath:  “Where search is simple – the only thing that matters is what’s typed in the box – display is more difficult. But what matters with display is the hundreds of things a user does. But by creating a unified marketing platform, we can understand, anonymously, what a site’s users are doing when they’re not on that site. APT creates a translation engine that enables higher levels of accountability – and that’s game-changing.”

—Exploiting the search-display connection: Without display, paid search wouldn’t be nearly as effective, Walrath says. While search and display are two different kinds of marketing experiences, they do tend to correlate, he says. And search is reinforced by display. “For example, if I’m typing ‘Honda Hybrid Automobile,’ it’s probably because I’ve heard of it somewhere before. It’s usually because I’ve had hundreds of marketing touchpoints with Honda up until that moment. We believe that marketers will want to understand how to attribute their campaigns’ holistic value across the marketing spectrum – online, offline, search, display. As the marketplace converges, there will be more opportunity to unify the buying, selling, reporting and tracking. That’s where APT comes in.”

—The perfect lighthouse: While display has been struggling, newspapers have been tanking. And where once, newspapers could look with certainty that online revenues would be up as ad dollars diminish, some are finding even the interactive side being pulled down. As Outsell’s Ken Doctor points out, newspaper execs frequently cite “Yahoo” when asked where their growth is coming from. And so, with Yahoo as newspapers’ beacon, Walrath describes Consortium members as the “perfect lighthouse” for APT because of their complexity. If you can make it work for newspapers, you can make it work for anyone, you might say. Walrath: “We’re talking about thousands of sales reps, hundreds of thousands of advertisers. There hasn’t been a system built to support that space—until now.”