Friday, 20 February 2009

Yahoo! tests new format search adverts

The New York Times covers the trial that Yahoo! is currently running with a new form of PPC advert, which integrates images and video. This is something Google already offers, but only for selected advertising with their third-party content network, whereas Yahoo!'s new test is targeting their main PPC channel on the Yahoo! search network.

Called Rich Ads in Search, Yahoo! is hoping that the higher profile and better clickthrough rates shown from the initial tests will attract more advertisers to use this format of advertising, and will also drive more clicks and therefore revenue from their search results.

Although Yahoo!’s traditional strength has been in display advertising, as the current economic recession has deepened in the US, many advertisers have shifted money to search, which gives them direct, measurable results. Yahoo!’s recent fourth-quarter results have reflected this trend, with search revenue showing an 11% growth and display revenue falling by 2%.

The article reports that Yahoo! has been testing these new adverts in a number of formats, with dog-food company Pedigree displaying a small video for a commercial when a user searches for the company name. The video opens up into a larger format and plays once clicked. Similarly, a search for Staples displays in a similar light-blue box with the company’s logo on the side, which is also a link to the corporate site. Alternatively, retailers can include a search box within the advert panel to enable searchers to enter a ZIP code, which will then take them to the advertiser’s website that lists the nearest stores or branches nearby.

Yahoo! is currently charging a monthly fee for the service, compared to the traditional auction-based pricing of search advertising. It is reportedly only allowing only a selected number of large, brand-focused advertisers to test the program. According to Yahoo!, some advertisers in the pilot program saw an improvement by as much as 25% in click-through rates, although an independent agency reported lower results, around 5-10% higher than the regular text adverts.

Yahoo! clearly hopes that this new type of search advertising will prove attractive to companies who pay high prices to develop their commercials and logos and want to be able to show those wherever they can. It may prove an important development for Yahoo!'s search performance as the company remains under pressure from financial analysts to consider selling its search business to Microsoft, who continue to express an interest in such a deal to grow their share of the search market.

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