Posted October 16, 2007 3:05 pm by with 7 comments

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It’s no secret: Google dominates search advertising (PPC). We often say that for anyone to legitimately challenge their dominance, they’ll have to capture more of the search advertising market. (Of course, to do that, you usually have to catch more market share, which you usually do by advertising, which you usually do with the extra revenue. . . .)

And now it looks like Yahoo might have a chance. According to 500 marketers surveyed by SearchIgnite and RBC Capital Markets, search advertising was up 7% in Q3 this year—and most of that 7% went to Yahoo.

The researchers found third quarter spending on Yahoo’s percentage of media spend increased 7.8 percent over the prior quarter. SearchIgnite and RBC noted spending on Google for the same period increased only 0.8 percent. MSN’s share increased from 5.1 percent in Q2 to 5.8 percent in Q3, but suffered a total spending drop of 3.4 percent.

And Yahoo kept beating Google in other ways:

The report also pointed out Google’s increase in impressions “was accompanied by a decrease in performance.” Google’s CPM dropped from $23.54 in August to $20.63 in September, says the report “due entirely to a drop in click-through rates from 4.4 percent to 3.8 percent over that span. Meanwhile, Yahoo’s CPM for the period increased from $9.32 to $10.07 because its CPC rose from 55 cents to 58 cents, according to the report.

However, it’s not all good news for Yahoo:

“Google gained steam when students returned to school,” says the report, noting Google’s share of impressions “soared from 54.7 percent to 62.3 percent.” At the same time, Yahoo lost ground, going from 39.7 percent to 32.6 percent.

The news may be too little, too late. Though they have conflicting stock ratings, the most recent is a “hold” rating received yesterday. Yahoo’s stock has begun to fall in anticipation of a lower Q3 earnings and revenue report after market close today. There are 9 days left in Yahoo’s “100 days,” but shareholders aren’t optimistic.

  • These surveys, reports, etc mean nothing to the advertisers, neither to publishers. YPN is more than two years online and almost no improvement, Many publishers were excited about YPN and were ready to move but after some tests decided to stick with low paying Adsense.
    Yahoo should do some solid work, release a solid working product. Surveys and researches wont convince me to switch to yahoo product unless I dont see any solid improvement.

  • Jordan McCollum

    A survey in which marketers explicitly said they spent more money on Yahoo means nothing to marketers? Maybe they should pay more attention to what they’re doing then.

  • It would be nice to see Google get a little more competition than they’ve had the last couple of years.

    Outside of the advertising I think Search Assist was a great addition and I think Yahoo has a lot of potential with their social properties if they can hook them together a little better.

  • Proof of the pudding is in eating it. If quarter four shows ad revenues dropping for google and it is off set by increased ad revenues to yahoo, I would say that advertising has helped otherwise, it would have been wasted money and effort.

  • Some of that could be attributed to Google CPCs for many terms reaching the breaking point, or rather advertisers who were out past that line for too long pulling back. There’s a lot of people bidding beyond their maintainable CPA and it’s only a matter of time before their hats were going to get pulled out of the ring, or at least reined in. Pair that with Panama putting the blinders on advertisers’ positions after a long history of knowing exactly where your amount puts you has led to a silent auction arms race. In any case, this is good news for advertisers and publishers alike. The closer in deliverability these services become the more options you have.

  • Marsha

    When a sick man lies up, it gets attention. Very impressive that Yahoo! was able to pull this off in just 100 days. The creativity and experience of their board is to be commended . Will this momentum last? Hard to say, if Yahoo! makes a run at Facebook or AOL (could happen) then they could make a sizeable dent in Google. Of course, we should always remember that someday, sooner rather than later, something better than Google will come along. What will Yahoo! (and Google) do then?

  • Yahoo beats Google in terms of sales conversion
    and cost per click.

    My clients were leaving Google Adwords for the
    reason of lower conversion and very hihg cpc.

    Also, yahoo search marketing sofware is much
    ruboust and very easy to use. Yahoo Search
    Marketing customer service is top notch while
    Google customer service is poor.

    Google stock price is a hype and will soon go
    down with a blink of an eye.