Yahoo-Google Deal Could Lift Ad Rates By Double Digits
As per an independent report submitted just recently by Searchlgnite, Yahoo’s search advertising deal with rival yet partner Google could cause over 20% jump in keyword prices for advertisers.
The report, which was prepared from 12 million paid search clicks via 15,000 active keywords managed through Searchlgnite’s technology from January through June, studied the cost distinction between Google and Yahoo for head terms, tail terms, and brand terms.
According to the report, a Yahoo-Google agreement could cause Yahoo keyword prices to escalate by an average of 22% in case the online search giant looks forward to gain profits as much as possible from the deal.
Searchlgnite president Roger Barnette termed the agreement as ‘financially beneficial’ for both Google as well as Yahoo, but said that advertisers will need to be cautious of the potentially significant impact to their search marketing efforts. He continued that majority of the marketers will see an increase in their overall costs for search advertising across the Yahoo network, and would require to accordingly adjust their search strategies.
As far as the deal with Google is concerned, Yahoo said that it mainly intended to use some of Google’s search ads for its tail category. Previously, it had said that some of its search pages do not run ads on its right hand column, due to which it will make use of Google’s search ads to bulk up its inventory. Also, as per the agreement, Yahoo will obtain a part of the advertising proceeds from those Google ads that get appeared on its search pages.
Advertisers use tail category specifically to use certain keywords as per their choice, so as to get their ads delivered to appropriate search results pages. On an average, the cost per click for bidding on the exact tail keywords on Google, in comparison to Yahoo, costs 12% higher to obtain the first position on a search result page, and as much as 28% higher for the fifth position.
On the other hand, head terms refer to the frequently used keywords such as ‘seo’ or ‘copywriting’. It is learnt that Yahoo obtains more for the first spot through the third spot on its search pages, compared to Google. To be exact, it receives 16% higher than Google for the first and the second positions using head terms, for instance. However, Google tends to make more money for the lower positions on the search page, like 23% for the fourth spot.
Finally, brand terms are those keywords that have the advertiser’s own name or product name. They are substantially more costly with Yahoo for advertisers who wish to obtain the first spot on a search page. Generally, the cost is 38% more, whereas the second and the third positions are comparable.
