Can Yahoo and MSN Catch Google AdWords?

BusinessWeek looks at the new efforts by Yahoo and MSN to try and take market share away from Google’s paid search business.

They look at Yahoo’s “Pananma” initiative, which we disclosed a couple of weeks back. They also look at whether adCenter’s demographic targeting will be enough to win it some of the multi-billion dollar pie.

However, analysts aren’t expecting Google to see much impact from Yahoo’s and MSN’s efforts.

…expect Google to continue gaining share even after its rivals adjust, albeit at a slower pace. One big reason: Even after overhauling their search ad mechanics, Yahoo and MSN won’t come close to matching Google’s total number of advertisers. Analysts believe Google has north of 400,000 ad clients, twice as many as Yahoo.

So while Yahoo tries to more closely mimic Google, and MSN bets on demographic targeting, what is Google focusing on?

…company officials like the long-term prospects of a fledgling personalized search offering…understanding the intent of a user from just two or three words typed into a search box. “The final 20% of targeting takes 80% to 90% of the work,” says Google group product manager Brian Axe.

So what is the best strategy for gaining market share? I say forget trying to convince individual advertisers and instead focus on us agencies. Convince us that we should be directing more client dollars into Yahoo or MSN and we’ll convince the rest of the audience – after all, many individual advertisers still look to expert advice online for guidance on how to optimize their PPC campaigns, and most of those “experts” work at agencies of some kind.

  • http://www.blogger.com/profile/12300112 Brent Franson

    Seems to me that whoever wins the share of audience will win the PPC wars. Doesn’t ssem to be about the product as MSN won’t catch Google, even though, in my opinion, they have a much better product.

    It is going to be hard to beat Google’s branding.

  • http://www.blogger.com/profile/23605440 Patrick Hopf

    Google’s strategy of understanding their users search behavior in an attempt to target ads is the same with anyone running a meaningful PPC Search business today. It means getting on the Desktop, and working intelligently around the privacy concerns. The click-through-rates improve drastically, especially meaningful for Ad Sense distribution.

    I think we all understand where this is going, and I think ultimately we’ll accept a certain amount of general behavioral monitoring: If this means our overall search experience will improve dramatically.