Blog Post

Is Yahoo Gaining in the Search-Ad Biz?

[qi:044] 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.

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.

17 Responses to “Is Yahoo Gaining in the Search-Ad Biz?”

  1. 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.

  2. 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.

  3. 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 or–both far better than Yahoo or Google in my opinion.

  4. 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.

  5. sv insider

    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!

  6. joe shmoe

    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!!