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Yahoo-Microsoft Search Deal: A Failure Or Success For In-House Marketers?

After Yahoo’s 1st Quarter 2011 earnings call, quite a bit is being written about whether the Microsoft-Yahoo deal is a failure or success for Yahoo. In my opinion, the more compelling question to ask is:  has the deal been a success for search engine marketers — especially those in-house?

The Results

Nothing screams marketing success like direct paid search revenue, and many search marketers aren’t seeing the same kind of revenue generation with Microsoft that was experienced with Yahoo. There are many confounding factors as to why any individual paid search account might be doing better or worse post-transition.

Some search marketers are seeing less total revenue for Microsoft-Yahoo than for Microsoft and Yahoo as separate accounts. As Danny Sullivan explains in his article The Yahoo Search Revenue Disaster, search revenue on Yahoo is down quite a bit, possibly due to explicit searches declining in favor of less quality searches (which are less likely to result in a paid ad click).

Further, according to the article above, Microsoft’s search volume hasn’t risen all that much (and frankly, could also be suffering from similar quality issues). Google has risen quite a bit, and likely from more direct searches. Net to a search marketer, the combined Yahoo-Microsoft may not be driving the same kind of traffic volumes as the separate accounts did pre-transition, and certainly any growth isn’t looking as good as Google’s.

On the flip side, in-house search marketers who largely ignored or under-managed their Yahoo accounts pre-transition, had a chance to spruce things up and optimize the account (or directly copy better managed Google AdWords campaigns) for their new AdCenter account.

The account that may have gotten short shrift due to in-house resources constraints suddenly had to be managed and transitioned, and good search marketers took advantage of that time to clean up house, if not redecorate it entirely. Marketers in this situation might be seeing some nice lift year over year in performance.

There is also the distinct possibility of lower bidding on Microsoft due to less restrictive broad matching. Negative exact keywords are not available as a Microsoft account feature, and they were not on Yahoo either. However, Yahoo’s broad matching appeared to be more restrictive and generally relevant when compared to Microsoft’s broad matching.

Search marketers may now be seeing many more general and irrelevant queries matching than previously (especially single term queries), and have limited negative keyword tools to control this matching. The only recourse then left to a search marketer is to lower the bid, and hopefully pay less for the queries that negative matching cannot prevent.

This may impact good traffic as well, and overall, could negatively impact account traffic, revenue and ROI. Some marketers actively bid for the poor matches with a very low bid to at least isolate the issue, which again, hurts overall ROI.

The Account Management Tools

One advantage of the Yahoo-Microsoft transition is the AdCenter Desktop tool, which is a superior offline manager to the Yahoo tool. A bit dated, but still relevant, is this In-House column article comparing desktop editors.

All in all, search marketers are better off with Microsoft AdCenter Desktop. An unfortunate side effect of the transition is that Yahoo ceased supporting, or even providing a download link for their desktop tool (the links redirect to the AdCenter Desktop), so non-US account advertisers can no longer access the tool to manage their account that have not yet migrated. Not ideal transition management for the many search marketers (like me!) with non-US accounts.

Some Microsoft platform differences have proved more cumbersome to manage than in-house search marketers would like. Confusing negative keyword management and slow/cryptic/inconsistent editorial approvals are issues about which I have heard repeated search marketer feedback. On a positive note, AdCenter reporting tools are more detailed, faster and automated than their Yahoo report counterparts.

Duh, Winning!

The Yahoo-Microsoft deal isn’t all bad for marketers. First off, no in-house marketer can claim that the time managing just one Microsoft account versus both a Yahoo and Microsoft account isn’t a significant time savings. One less paid search account to manage is a definite upside of the deal. For a true cost-benefit analysis, the time spent migrating campaigns and transitioning from Yahoo should offset these time savings gains, but still, it’s likely in-house marketers come out ahead in account management time.

One other positive side effect is that several reluctant Microsoft advertisers are now advertising via AdCenter. Many search engine marketers expressed skepticism and excuses to avoid taking on Microsoft search engine marketing. Search marketers expressed opinions on the quality of Microsoft’s paid search offering, in terms of management tools and traffic, but also simply not having enough time or bandwidth to manage another account.

The Yahoo-Microsoft deal essentially compelled Yahoo advertisers to give Microsoft a go, at the very least to manage Yahoo traffic, and if a marketer is doing that, well, it’s pretty easy to flip the switch to at least test the traffic from Microsoft properties as well.

Tallying up the points in the plus and minus columns of the Yahoo-Microsoft advertising deal, it’s not easy to see if in-house marketers come out ahead or as a losing party.

If a marketer wasn’t previously advertising with Microsoft, they are probably seeing a nice gain in their campaign results from the additional Microsoft exposure, which likely masks Yahoo traffic and revenue losses. Winning!

For search marketers with already mature Microsoft accounts, the time suck of migration, coupled with Yahoo losses and less than ideal Microsoft matching controls, isn’t likely making anyone feel like they are coming out ahead in the deal. Losing!

In the end, the campaign results speak for themselves. The best thing Microsoft can do to convince search marketers they are all winners is to increase quality traffic and provide better account management controls.

Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.

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