I think I might want 55% less Yahoo Sponsored Search Traffic

By Tad Miller | May 22, 2008
More Articles by Tad

I manage a pretty large online advertising budget for an Auto manufacturer. With this kind of advertising spend the search engine account managers are very happy to meet, correspond and answer questions.

The timing of my automotive client’s Yahoo quarterly meeting with recent news about where the majority of its paid search traffic really opened my eyes about the quality of Yahoo’s Sponsored Search Traffic.

The recent news concerning Yahoo comes from a study from Efficient Frontier, which says that only 45% of Yahoo’s paid search clicks come from search.yahoo.com. The remaining 55% of paid traffic comes from Yahoo’s syndication partners, of which there are currently almost 1,200.

I’ve always known that Yahoo had “syndication partners” where my client’s ads would show. But I never imagined that they could make up 55% of the paid search traffic and that they had almost 1,200 of these partners.

Every client I have ever managed Yahoo Sponsored Search advertising for has always had the highest conversion costs, lowest conversion rates and the lowest click-through-rates when compared to other search engines. I’ve always thought that Yahoo had an unusually high number of impressions also – sometimes more than Google for identical campaigns. Strategically I have always taken the approach of reducing bids and ad position to make Yahoo more affordable.

I now believe that the syndication partner traffic is absolutely the main cause of Yahoo’s high cost per conversion and poor conversion rates. As I dug a little deeper I found Aaron Wall at SEO Book passionately agrees:

Because Yahoo! makes it hard to opt out of search syndication they are essentially paying shoddy syndication partners 70 to 80% payout for arbitrage that builds volume, but destroys the value of Yahoo! Search.

Put another way, a Yahoo! click for “mortgage” is worth the same $15 that it costs on Google, but it goes for less than $5 because Yahoo! forces advertisers to eat junk traffic too.

Efficient Frontier’s study also states that even though 45% of the paid search traffic is actually coming from Yahoo Search, 58% of the conversions are coming from it, which obviously shows that its superior traffic to the syndicated search traffic.

In my meeting this week with my Yahoo account representatives they showed me that my client’s account had an extremely low Share of Voice “SOV” percentage. After reading the New Frontier study and Danny Sullivan’s article about the same study I realized just how true the study was and if anything it might have actually overstated the 45% of search traffic for my client. My Yahoo account representatives also informed me that they had no way of showing me what the client’s SOV on just Yahoo Search was and that the list of Syndicated Search partners was not available.

Suddenly I realized why all my clients Yahoo advertising accounts had such low click-through-rates – especially in comparison to the other search engines that utilize the same exact ads and keywords. The low quality of the search syndication partner traffic was also likely skewing costs per conversion and conversion rate in the wrong direction.

So what can be done to improve the quality of a Sponsored Search advertiser’s traffic? Unfortunately, not much. Unlike Google which allows an advertiser to opt out of the entire Google Search Network, Yahoo requires all advertisers to use the sponsored search syndication network. Yahoo has allowed advertisers to exclude up to 250 domains from showing your Sponsored Search ads. But 250 is just a drop in the bucket when it comes to almost 1,200 sites.

Google has similar problems with its Search Network and Content Network traffic quality, but the distinct difference between the two engines is that Google allows advertisers to opt out of both Content and Search networks, gives Performance Placement Reports to show what URLs are showing your ads and allows as many excluded URLs as you want for both Search Network and Content Network traffic. Google also offers demographic targeting of its Content Network traffic and allows exclusion of rude, crude or controversial Content Network sights.

Apparently, the quality of this traffic is part of a lawsuit against Yahoo (filed in 2006-I can’t find where it stands now). The suit apparently claims:

…that Yahoo regularly uses its relationship with adware and typosquatting sites to gin up extra revenue around earnings time, alleging that the company is conspiring to boost revenue by partnering with some of the Internet’s seamier characters.

I’m not ready to abandon advertising on Yahoo, but I’d love to see what would happen if I could have the option to opt out of Yahoo’s syndicated search program. Until that happens, I’ll have to monitor server logs to find my 250 sites to opt out of and hope that it makes an impact. I’ll start with a “high quality” one like this, which on first blush looks like a search engine – but is acually just presenting paid ads to look like search results.

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