Is Yahoo Gaining in the Search-Ad Biz?

Om Malik, Monday, October 15, 2007 at 2:12 PM PT Comments (17)

Apparently the answer is…yes! According to a study by SearchIgnite and investment bank RBC Capital Markets:

While marketer spend increased quarter over quarter by 1.8 percent, marketers in the third quarter were apt to put their increased budget in Yahoo. Spending on Yahoo increased by 7.8 percent from Q2 to Q3 while Google only increased 0.8 percent, reversing previous trends.

One way to look at this: Google (GOOG) has a much larger market share, hence slower growth. Yahoo (YHOO) is still trying to make a comeback from a smaller base. Nevertheless, it seems as though the Yahoo team might be doing something right — and fixing what is broken.
yahoosearchgains.gif

Yahoo was able to increase its share of total search media spend to 20.4 percent in Q3, up from 18.5 percent in Q2, marking the first reversal in share since the initial February uptick related to Panama. Google’s CPC remained flat and eCPM (revenue per thousand impressions) fell between August and September despite a new algorithm change in late August that was intended to increase the price of bidding for first position.

Maybe this will save some VP-level jobs at Yahoo when Jerry does some housecleaning.

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17 comments so far

October 15th, 2007
4:29 PM PT
joe shmoe said:

I’ve used Y! search exclusively for the past year or so and of late I find myself clicking on ads way more often than I did in the past. The relevancy of both search results as well as ads has gotten as good as Google at LEAST. Yahoo is also not behind in page-loading times — no reason for me to switch to Google.

Local info integration and other shortcuts come in very handy as well. I sometimes laugh at the publicity Google got when it launched Universal search when almost all of that was already available in Yahoo. Talk about media sleeping with Google!

What perhaps Yahoo does lack is a bit of polish on their maps app, IMHO!

Oh and can’t live without Google?! My ass!!

October 15th, 2007
7:15 PM PT
sv insider said:

i’ve had a very similar experience as joe above.

i use yahoo for things like yahoo finance and email, and was using google for search. when the new search came out i did several side-by-side search comparisons and i have to say thatthe new yahoo search is very cool. specifically, i’ve noticed that the results are just as good as google, sometimes better, especially with the local angle. now i am now also using yahoo search. the funny thing is that the only time i go to google now is for a google group that i’m active in. occasionally i still double-check a search to see if google picks up anything worthwhile that yahoo missed….so far i haven’t seen it.

competition is great for the end user!

October 15th, 2007
8:33 PM PT
Ian said:

There ad bugdets will always be proportional to the percentage of search traffic. The gain and/or losses one way or the other between google and yahoo are just a reflection of a pendulum effect as marketers chase relative deals. As marketers shift budgets from google to yahoo or vice-versa they lower the prices on one vs the other.

October 15th, 2007
9:19 PM PT
sv insider said:

the ad $$ always (unless its a test) goes to the engine providing the best ROI. traffic is not the main driver.

October 16th, 2007
4:56 AM PT

Yahoo is on right track by going back to basic - they had done 2 mistakes in the past

  1. Refused investment in Google
  2. Try to become media company rather than information manager.

but it is never too late!

October 16th, 2007
6:05 AM PT
Dhiren said:

atleast its gonna end google’s monopoly. I have also seen that yahoo ads yield better greens for small websites too.

October 16th, 2007
10:05 AM PT

[...] with investment bank RBC Capital markets, reports that Yahoo’s portion of text ad spend has increased by almost 2 basis points from July to September, while Google’s share remained flat and eCPM [...]

October 16th, 2007
10:22 AM PT

A refreshing article after overload of Google love we were all seeing.

October 16th, 2007
11:03 AM PT
jgrab1 said:

It would have been nice to explain what Yahoo may or may not be doing different that’s causing this to happen. That would have given the article some content.

As for me, I use Alltheweb.com or Ask.com–both far better than Yahoo or Google in my opinion.

October 16th, 2007
4:04 PM PT
Denver said:

Yahoo’s ROI IS better, in my experience.

And when in late-summer Google stupidly re-formulated their CPC calculator to reflect the max bid of competitors, as opposed to the bare minimum to be shown, CPC bids skyrocketed. What people were getting for .05 and .10 CPC sprung to 5.00 and 10.00 overnight. No, thank you! As a small business, we can NOT take that kind of a hit. At that point, we said, “Good day, sir!”

I took my Search Ad business elsewhere (i.e. Yahoo!) and haven’t looked back.

These days, I only use Google’s Content Network, where you can still get exposure for .01. As soon as Yahoo gets real regarding Content bids, I’ll gladly start testing their content-ads’ ROI too…but not at the .10 CPC for content ads that they currently charge…there is FAR too much click fraud on content networks to justify that kind of cost.

October 16th, 2007
8:10 PM PT

[...] have been migrated to the Panama platform and the new ranking algorithms (which Om earlier indicated was helping Yahoo win a bit more of the spending) are being rolled out in all markets. Just how much [...]

October 16th, 2007
8:52 PM PT

You could also look at this as CPC is going up on Yahoo (as I’ve seen). That might not be a good thing long-term since ROI for advertisers will decrease unless conversion rates go up accordingly.

Google understands this and has rolled out Google Analytics and Website Optimizer as FREE tools to help ROI. Yahoo is a distant third place in analytics and are still catching up on functionality.

At the end of the day there is just little volume from Yahoo for most advertisers. Even with good ROI you can keep your campaigns at full throttle and not hit spend caps. What every advertiser wants is eyeballs. They are on Google.

October 16th, 2007
10:30 PM PT

[...] One of the knocks on Yahoo! has long been that although it has a fairly large second place stake in the search market, it has never been able to monetize search effectively. A new study from SearchIgnite and RBC Capital Markets indicates that Yahoo! is making progress on rectifying that, however. According to the study, even though Google’s share of impressions rose dramatically between August and September, and Yahoo!’s fell at about the same clip, Yahoo! beat Google on eCPM for the first time since February. Google’s eCPM was down due to falling click-through rates, while Yahoo!’s was up due to higher CPC figures — Yahoo!’s CTR has stayed more or less the same since May. Is this the much vaunted Panama advertising platform finally paying off? Yahoo! saw the percentage of the total ad spend on its search properties raise in July and August and fall in September, Google saw an opposite trend — ad spending fell over the summer and jumped in September. The spending trends appeared to coincide with the back-to-school bump in search volume and paid search impressions that Google felt, which resulted in a near equal but opposite dip in search market share for Yahoo!. In the third quarter as a whole, however, overall spending increased 7.8% over the previous quarter for Yahoo!, while Google saw an increase of just 0.8% for the same period. In July we took a look at Yahoo!’s Panama initiative 6 months in, and found no real concrete evidence to make a determination about whether it was or wasn’t working. One study we looked at in that post noted that campaign conversion was actually down since the launch of Panama. Regardless, advertisers spent more per click for the same CTR this summer on Yahoo! search ads. Could that suggest improved conversion rates from Yahoo! ads? Modest gains aside, Yahoo! still has a long way to go to catch Google. The latest comScore numbers have Yahoo! still well behind Google in terms of market share, and as the chart above shows, in spite of spending gains, Yahoo! still has a long uphill battle to catch Google. But that Yahoo! is beginning to see more dollars being spent on their search ads is a good sign for the company. My rudimentary knowledge of search marketing suggests to me that gains in eCPM based on higher CTRs would be better than gains based on higher CPCs, but that advertisers are will to spend more per click is good news for Yahoo!. Via GigaOm. [...]

October 16th, 2007
11:45 PM PT

[...] they maintain a competitive advantage relative to others. For instance, as Om Malik points out, Yahoo is making a bit of a comeback because it’s proving more efficient for some marketers and some campaigns. And as small [...]

October 18th, 2007
5:53 AM PT

[...] under pressure to demonstrate concrete gains from its various reorgs and initiatives. Om Malik has some additional detail on the [...]

October 19th, 2007
11:36 PM PT

[...] worldwide struggled for years to get a truly competing product to AdSense. Om says that Yahoo’s Panama and search marketing is gaining some traction but I am still skeptical about the completeness of [...]

January 8th, 2008
6:37 AM PT

eu sunt handicapat da

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