Two weeks ago on, February 10th, Yahoo released two new search marketing products. Both products were unveiled to show the search market that even with the Yahoo-Microsoft ad partnership deal in place, Yahoo will continue to evolve and innovate in the search marketing space. Let’s take a look at the two new releases and see just what has been going on in the Yahoo lab lately.
The first product they announced was the Y!our Ads strategy. What Yahoo is doing here is serving ads based on the user’s past search history. By placing a cookie on the user’s computer, they are essentially retargeting that person further down the search road. As we all know, traditional pay-per-click (PPC) ads are served based on the immediate search terms of the user. This relevancy is what has made them so successful over the years. With Yahoo throwing a curve ball like this, I am sure there will be plenty of debate from both sides as to if this is the best direction to go into with search. Only time will tell if this type of targeting will work in the search space, but my guess is that they will not be as effective. By losing some of the relevancy of what the user has just searched for, I think advertisers will see much lower clickthrough rates. Also, a percentage of users that do make the click will be less likely to make a conversion due to the lack of relevancy.
The second product that Yahoo released was the ability to now serve ads via Yahoo Search Assist. What this means is that the words and phrases that appear just below the search box will now be for sale. For example, if the user types in “Olympic” they would instantly see search suggestions for various events such as “Olympic figure skating” and “Olympic hockey results.” Going forward, these suggested phrases will be for sale. What this will do is dilute some of the broader keyword searches into some of the long-tailed 3-7 keyword phrases. Advertisers will now have to make bids for the broad keyword at the Yahoo Search Assist level, while also expanding their traditional search campaigns to include bids on the more searched long-tail phrases. Great news for Yahoo as they can now capitalize on more search for these lower-volume keyword phrases, but bad news for the sophisticated PPC marketers already advertising in that space. There will be a steady rise in competition once this is more integrated into campaigns.
In June of 2009 Yahoo agreed to put Microsoft in the driver seat of the technology side of their search business. Even with this agreement in place, Yahoo is making strides to evolve as a leader in the search marketing space. It will be interesting to see if Google takes any of these strides by Yahoo and incorporates them into their own search platform.