Archive for the ‘search engine marketing’ Category

What Should Yahoo! Search Advertisers Do?

July 29, 2009

Given the news that Yahoo! has thrown in the towel in search and will scrap its Panama search advertising platform in favor of Microsoft’s adCenter, what should current Yahoo! advertisers do to prepare for the upcoming new landscape? Here are a few suggestions:

  1. If you don’t have an adCenter account, open one now! Get experience working with the adCenter interface and get used to its auction marketplace as well as its various tools. The more experience you build now, the easier your transition will be when the switch takes place. You can start here.
  2. Continue maintaining and optimizing your Yahoo! Search Marketing account. You will likely still be using it well into 2010. Whether to continue building out your Yahoo! campaigns is primarily a tradeoff decision. If you have the time and resources, by all means do so, because it’s very likely that Yahoo! will provide a decent migration path to adCenter when the time comes. But if you have to sacrifice one or the other, I would rather focus on building expertise with adCenter.
  3. Don’t take your eyes off your Google AdWords campaigns. They likely drive the vast majority of your volume as well as performance. Don’t get distracted by the 30% and drop the ball on the main 70%.

I hope to write more about this topic as I absorb the implications of the deal.

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The End of Yahoo’s Panama Search Advertising Platform

July 29, 2009

Today’s announcement of the Microsoft-Yahoo! search deal is the official beginning of the end for Yahoo’s Panama search advertising platform. As part of the deal, Yahoo! has agreed to transition its advertiser base over to Microsoft’s AdCenter platform over the next year or so. This implies that Yahoo! will stop making any improvements to Panama and focus all of its technology resources on its APT display advertising platform.

How did Yahoo! get to this point? A variety of reasons:

  • Once Panama was fully launched in Q1 of 2007, Yahoo! took its eyes off the ball and moved resources away from Panama. The initial launch was only supposed to be a starting point for a series of innovations and improvements over the ensuing quarters. With engineering resources shifted to build its display platform, Panama stagnated over the course of 2007 and fell far behind Google AdWords and Microsoft AdCenter.
  • Yahoo! kept losing market share in search. No matter how well Panama worked (and it did work quite well), the market share losses on the audience side cancelled out the financial gains achieved through Panama. Over time, Yahoo’s search advertising offering became less and less important to search marketers due to its continuously shrinking relative query volume. As advertisers defected or focused their efforts more on their AdWords campaigns, it only exacerbated Yahoo’s problems.
  • Yahoo! tried to do a deal with Google to make up for this deficiency. However, the deal fell through due to anti-trust concerns, with Microsoft cheer-leading hard against it.

So here we are, barely two and half years after the launch of Panama, and by all indications the platform will no longer be in existence by the end of 2010. Yahoo’s inability to commit to competing in search and failure to dedicate sufficient resources to its search products brought the company to this position. Now they’ve given up on search, taken the money from Microsoft, and effectively run from the market. What a shame.

Amazon Ending Affiliate PPC Arbitrage Game

April 7, 2009

I have a “dummy” website where I test out various online advertising products (AdSense, YPN, Amazon Affiliates, etc).  I got an email today from Amazon informing its affiliates that it will no longer pay referral fees for direct referrals through the paid search channel (affiliates can still use paid search, but they would initially need to direct that traffic to their own website).

There’s lots of speculation in the blogosphere around why Amazon would make such a decision. From my experience in the paid search industry, my guess would be the following:

Unlike others like eBay, Amazon has traditionally not been a ubiquitous PPC advertiser, instead relying on its affiliate network to monetize search traffic, especially in the tail. It is very likely that Amazon is in the process of significantly expanding and enhancing their internal SEM initiatives, having observed for years the effectiveness of the paid search medium in generating high-ROI leads.

By eliminating affiliate PPC direct-links to Amazon.com, Amazon seems to be counting on getting these referrals directly themselves, bypassing the middleman and its sizable commission, leading to higher ROIs. At the same time, the secondary effect on the paid search marketplace may also be favorable to Amazon’s SEM campaigns. By disallowing affiliates to use direct links to Amazon.com, it would make the economics of arbitrage less attractive to the former, since any type of intermediate landing page in the acquisition “funnel” would likely result in a large drop off in conversions, as only a portion of the traffic clicks through to Amazon’s site. The effect is to discourage affiliates from playing in the SEM space and help Amazon face less competition, especially in the shallow marketplaces of the tail.