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Yahoo Losing, Google Gaining Display Dominance



It was the American Revolutionary John Adams who first said, “The Revolution was in the minds and hearts of the people.” In case you missed the memo, Google is winning the search war—if you measure success by looking at who controls most of the search market. Yahoo, their biggest competitor in the US, has steadily lost out to the search giant over the last decade. But there was one area where Yahoo always beat Google—display ads.

While Google controls up to 73% of the search advertising market revenue in the US, Yahoo has only 13%. On the other hand, Yahoo controls a third of the display market (worth $7.1B last year), while Google has barely made a dent in the display market, and most of its revenue comes from search, while Yahoo’s (not exactly stellar) revenues are far more diversified.

The days of Yahoo’s dominance, however, may be numbered. Google is whittling away at the perception of Yahoo’s display supremacy, and Yahoo isn’t doing enough to fight back in display or search, according to a survey covered by Ad Age:

“Perceptions of Yahoo are strong and are improving, but what’s surprising is how well Google’s display efforts have succeeded in creating equally strong perceptions on Yahoo’s turf,” said Advertising Perceptions CEO Ken Pearl. “Since positive perceptions lead to increasing ad revenue, it will be interesting to see how the online-display market plays out over the next several months.”

Other key findings from the survey include:

  • Advertisers surveyed said that Yahoo was 29% better than the average, but Google was 43% better (compared to the 150 online media companies in the survey).
  • Yahoo still wins out in marketing services, rated at 42% better than average. Google only got 7% better than average.
  • Advertisers perceive virtually no difference between display ads audiences on Google and Yahoo.
  • Google scored 19% above the industry average for customer service, while Yahoo ranked 9% above average.

Note that none of this says that anything has actually changed. Instead, the survey looks at people’s opinions—because, like the Revolutionary War, this battle is fought in the minds and the hearts (but this time it’s the minds and hearts of advertisers and consumers).

Meanwhile, Ad Age concludes that the best way for Yahoo to keep control of display is to do better in search:

Ironically, [VP of Analytics for Omnicom's Organic Steve] Kerho said he believes the best way for Yahoo to protect its display-ad business is to find a way to succeed in search. “When you look at how people consume media online, it’s search and display. Their ability to give end-to-end solutions is hampered if they have to outsource part of that,” he said.

New CEO Carol Bartz seems to see this as well. So far, she’s said that she realizes how key search is to Yahoo’s business.

What do you think? How can Yahoo maintain its control of the minds and the hearts of advertisers, and thus the display ad market?

  • http://www.motorcrunch.com/ Car Blog

    I was aware that Google makes most of its money from search but Yahoo search is better then Google.

    Car Blog’s last blog post..Cars To Be Launched In India In 2009

  • http://thesmallbusinessmarketingblog.com Kenney and Kim

    Very interesting topic. I made a comment about this recently on one of your other post.

    It’s interesting to see Google creeping up on Yahoo here, but not surprising.

    Yahoo doesn’t really talk about their display ads platform (banners) to the world as much…it’s not as “popular” per say.

    Meaning if you search the net for ways to advertise it’s rare that you see some marketer mention heading over the Yahoo to test display ads, but you do here people talking about PPC and going over to Google to use Adwords.

    Yahoo should take some notes from Google and start making their display platform easy to use, and quick to start showing ads, like Google does with their Adwords program. They should also start a “buzz” campaign and direct response campaign that gets marketers talking about the Yahoo advertising (display) network.

    People don’t know enough… Yes they have big advertisers, but only online marketers I hear really talking about using them are the Garcias. But they talk about using big ad budgets, $10,000+

    Yahoo is now seeing Facebook grab some of this market and Myspace (well kindof). They need to get people talking, they need to make it easy and fast, and they need to make it available to the normal mom & pops marketers like Google does. This gets people involved and spending money and then more once they try it.

    They could start giving out free coupons and stuff for people who want to test it out.

    Let the world know that they are doing 7.1 Billion dollars here and that they are the best at what they do in this arena before they lose out to Google and Facebook. They should also get more reach. Google has been well known for increasing their reach, which is why their Adwords platform is All That. lol

    Anyway, this comment is pretty long.

    Thanks for the great post Jordan and Have a great day Andy.

    Kenney

    Kenney and Kim’s last blog post..7 Small Business Marketing Tips That Will Grab Your Market’s Attention

  • https://perfectmoney.com/?lang=id_ID muri

    yes it is google gaining great display with there dominant of explorations and courage and flexible attitude,I dont think yahoo can tackle down the google road of glory till the years to come

  • http://www.free-xbox-360.co.uk Milo

    “While Google controls up to 73% of the search advertising market revenue in the US”

    I thought that was around 90%? According to a different post by andy?

  • Jordan McCollum

    According to the Ad Age article:

    “Google is still a nonplayer in display, and earns 99% of its revenue from search” but “Google accounted for 73% of the revenue in the larger and faster-growing search-ad marketplace, compared with Yahoo’s 13%, according to eMarketer. “