Yahoo!-Google Partnership to Raise Cost for Marketers, Keyword Prices on Yahoo! Could Jump over 20% According to SearchIgnite Report
2008-07-15 07:30:00
ATLANTA–(EMWNews)–New data reveals that Yahoo!’s decision to
outsource some of its search advertising to Google will likely raise
average keyword prices on Yahoo! for most marketers. The findings come
from the latest quarterly study released today from SearchIgnite, a
leading provider of search and auction-based media optimization
technology managing more than $350 million in paid search annually. For
its Q2 report, SearchIgnite analyzed 2008 year-to-date paid search
activity across Google and Yahoo! to gauge the cost impact of the two
parties’ proposed partnership on marketers and
the broader industry.
According to the plan proposed by Yahoo! and Google, Yahoo! plans to
selectively choose advertising from Google for select keywords and
advertising positions. The analysis by SearchIgnite compares the cost
per click (CPC) of running the same keyword for the same advertiser in
the same position on the page (“rank”)
across both Google and Yahoo! in order to estimate the potential pricing
impact.
Key findings include:
-
Keyword prices on Yahoo! may increase by an average of 22%, assuming
Yahoo! pursues a profit maximization strategy.
-
While average keyword pricing on Yahoo! will increase, projecting the
actual increased cost for a given marketer is highly dependent on the
proportion of spending across the three different types of keywords
analyzed (see below for detailed explanation) and the ad ranking on
the results page (e.g. first position vs. fifth position).
-
Tail terms, defined as words or phrases that are very specific and do
not see high search frequency, are priced at a premium per click on
Google for all positions, with an almost 20% gap by position #3 and
35% gap after position #5. While these terms do not see the search
frequency of more common keywords, taken in aggregate, they can
account for a significant portion of a marketer’s
clicks and revenue driven from search.
-
Head terms, defined as commonly searched keywords, are priced at a
premium per click on Yahoo! on average for the first three positions.
After position #3, head term advertising on Google becomes more
expensive on average. Bidding on these keywords is generally more
expensive due to their large volume of searches and high competition
among advertisers.
-
Brand terms, defined as keywords that include marketers’ own brand or
product name, are consistently priced higher per click on average for
the first position on Yahoo! than on Google, with positions #2 and #3
collectively priced roughly the same between the engines.
Understanding these keyword price variations can help marketers better
adapt to the expected price increases as a result of the partnership.
“The deal is clearly financially beneficial
for both Yahoo! and Google; however, advertisers need to be aware of the
potentially significant impact to their search marketing efforts,”
said Roger Barnette, President of SearchIgnite. ”Most
marketers will see their overall costs for search advertising across the
Yahoo! network increase, and will need to adjust their search strategies
accordingly.”
This report is the latest in a series of quarterly reports released by
SearchIgnite that tracks results across the engines. Previous reports
can be found at: http://www.searchignite.com/about_research.aspx.
About SearchIgnite
SearchIgnite is a powerful search management and auction based
optimization technology that simplifies large cross-engine search
campaigns, providing marketers and advertising agencies with one central
platform for managing, optimizing and tracking complex keyword
portfolios in real time. Marketers who use SearchIgnite have full
transparency and control over their campaigns with flexible bid
management capabilities including manual bidding, rules-based bidding
and portfolio optimization. Leading marketers and agencies depend on
SearchIgnite to simplify and maximize the performance of their paid
search campaigns. SearchIgnite is part of Innovation
Interactive, a digital marketing services company. For more
information, please visit http://www.searchignite.com/.
SearchIgnite |
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