Google AdWords in the Yahoo! Network

May 7, 2008| 3 Comments »

The pay-per-click environment is changing rapidly. Microsoft’s attempted acquisition bid has forced Yahoo! in to an ad-distribution deal that will see Google AdWords appearing in place of Yahoo Search Marketing ads across much of the Yahoo! network. Yahoo! was using PPC advertising delivered by Google to bolster revenues in order to push Microsoft’s bid price higher while exploring the viability of giving Google its PPC ad-space should Yahoo! wiggle away from Microsoft’s control.

Yahoo! ran a test last month in which it displayed Google-driven results beside approximately 3% of US search results. Since Google has a much larger inventory of PPC advertisers to draw from than Yahoo! does, it has a better chance of finding the right ads against keyword queries. The experiment showed that ads injected from Google’s AdWords network converted better and drove higher revenues.

The experiment has led to a short-term deal between Yahoo! and Google, one that served to derail Microsoft’s attempt to acquire Yahoo!.

The HooGoo deal, while driving up Yahoo!’s projected and real bottom line and giving it a lucrative lifeline, has attracted attention from the FTC and SEC as it potentially gives Google over 90% of the PPC market. It’s attracting our attention too.

PPC Assurance is in a unique position as one of the only independent PPC click-stream analysis providers. PPC Assurance was designed to monitor and improve PPC driven traffic and detect invalid click activity. We’ve found an enormous number of invalid clicks caused by explainable mistakes made by the search networks or within the campaign settings of PPC advertisers. We expect to see more very, very soon.

Integration of AdWords into Yahoo!’s content stream is bound to lead to a greater number of campaign placement errors, those that show your ads in areas or at times outside campaign parameters set by the advertiser. While PPC advertisers can expect to see greater traffic as the contextual relevance of pay per click ads in the Yahoo! network improves, we anticipate they will also see a larger number of misplaced ad placements leading to a greater number of invalid clicks.

How long this situation will stay in place or the depth of ad integration with Google is anybody’s guess. Though the maneuvering between Microsoft and Yahoo! appears to be over, industry watchers anticipate Ballmer might take another stab if Yahoo!’s share prices plummet as expected.

As it stands today, the acquisition attempt was unsuccessful and Yahoo! will likely pursue deepening its relationship with Google Ads; so long as the FTC and/or the SEC allow them to. A rejection from the FTC or SEC could reopen the door for a second Microsoft takeover attempt.

Whichever way the networks move in the coming months, the PPC marketing environment is going to undergo a radical makeover. Enquisite’s PPC Assurance will be measuring and monitoring traffic as it does, generating as many invalid click refund reports as necessary. Make sure your PPC campaigns are monitored, especially during this time of network integration.

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