Google / Yahoo Deal

With the recent Google/Yahoo deal where Yahoo will display Google ads on some (or all) of its search results pages, it could have a major impact on advertisers on both platforms. Microsoft is currently trying to stop it, citing it will produce a monopoly in the paid search advertising market.

I am interested to hear everyone's thoughts on this. Do you think it will help or hurt PPC advertising? Does it give Google too much power, or does it really strengthen the paid advertising space?

I could see this as a deterent in the future for smaller ecomm businesses to get their sites found in a PPC environment. I think it may drive up the bids for top position and effectively force out the little guy.

On the other hand as people start to recognize that most of the top paid results are coming from somewhat irrelevant sites they might start investigating the lower ranked sites...especially if they have well written, "search relevant" ads.

 I guess it all depends on which side you're looking at it from.

On one hand, allowing Google to control search engines allows advertisers to hit a wider range of people.

However, the monopoly point is a good one. If we give so much power to Google, how big of a step is it before they can decide what actually gets online and what doesn't? Will Google start choosing between competitors? Will Google start picking what ads actually make it to the search? How big of a step closer is this to the countries that have censored/controlled internet (although in those countries it is by the gov't and not by a single search engine).

 Tread softly and carry a big stick... A friend of mine always said that. Meaning... it's not totally out of the question to allow smaller companies to be bought out by bigger companies, but we have to make sure that it doesn't get out of control. We need to make sure that the little guys are treated fairly until they are ready to sell. By no means am I calling Yahoo a little guy... but if Yahoo wants to make a deal, let them. Only when Google is too influential should we worry.

I feel that playing the monopoly card here is definitely a hinderance to innovation.  It's not just about the money, but the analysis in different environments to create more data for analysis to better PPC advertising.

I feel that the future of search will be significantly different from the interfaces we currently use and that an architecture of categories and subcategories will be introduced efficiently making search more targeted which will ultimately bring refinement to the PPC space.

And so on and so on, innovation will continue to thrive in these spaces creating solutions to so called problems.  Maximizing usability, relevance and revenue.

As the whole idea of web2.0 grows daily there's also a chance that PPC advertising on search results pages could become increasingly insignificant. As people rely more and more on sites like twitter, facebook and the like to stay up on the latest trends it wouldn't surprise me to see more people opting to go with content advertising as opposed to search advertising. The evolution of analytics tools could play a factor here as well, but that's probably something that could be expounded on in another topic.

Adam,

I agree with you to a degree about that. As the internet evolves and people use things in different ways, the advertising methods need to adjust in order to stay relevant for those advertisers who are paying for a return. I do think that with whole 'social' element being the current trend that we will see more advertising targeted using social metrics. I think that includes targeting based off of content regardless as to whether it is a blog, user profile, tweets, or anything else. In the end it is always about matching the ads with the content and ensuring they are in sync.

My question was primarily more around how the deal would effect pricing and competitiveness for advertisers. If you are pooling in anyway, the supply of advertisers from two major search engines, how does that impact the little guys. You know someone like me who may have a $20 a day budget for PPC competing with advertisers only in Yahoo, may suddenly see a change in how far that money goes if you throw Google advertisers in that same pool competing for the same users. The deal may not be explicitly set up that way, but it does make it that much closer to becoming a reality.

It's true, it will become tougher for the little guy. However, assuming people do their research (as they should before throwing their money towards any type of advertising) they will know that Google has such a large majority of the market that it would make the most sense to only want their ads to appear in their results. Of course this assumes Google is giving people the option of only spending their money in Google searches as opposed to opening themselves up to the entire network.

A good analogy would be the yellow pages. If you were an advertiser and had a choice between, let's say, Yellowbook and AT&T and Yellowbook distributes to 200,000 homes and businesses and boasts a retention rate of 40% while AT&T distributes 100,000 and boasts a 30% retention rate you would probably want to advertise with the larger book. But over time the competition in the larger book grows so fierce that "the little guy" really has no choice but to take his money and dump it in to the more affordable, albeit smaller, book. Actually being seen in the smaller book that distributes to a smaller audience is probably a lot better than being buried in the big book that goes to a large audience.

Now I know what you're going to ask. What happens when Yellowbook partners with AT&T and starts offering Yellowbook advertisers space in the AT&T book? Well, if the advertiser has done his homework (and again, hopefully he has) he'll tell his Yellowbook rep "no, I don't want to be in that other book because no one uses it". Would such a partnership hinder the chances of the little guy? It certainly wouldn't help, but I don't think it would be as bad as people might anticipate.

This seems apparent currently, but I feel that this is obviously a concern to all who publish PPC content (i.e. Google, Yahoo, etc...)

The "search" landscape will change so drastically that this hopefully will not be as big of a concern.  As historical data and demographic data expand and become more accurate, I would be more inclined to believe that you will see extremely targeted products offered in similar models like comparison sites that give precedent to price and are still visual ppc product ads.  But this should change where instead of a price precedent making it the attributes of product data coupled with the historic demographic data (age, wages, trend, lifestyle, etc...)

I forsee an integration into our daily mobile devices (which has begun now), where the advertising is so powerful that you obtain realtime information and special coupons / discounts to consumers just because they are in that specific location, which could drive conversion.

If someone would hurry up and purchase the 700 mhz spectrum http://en.wikipedia.org/wiki/700_MHz_wireless_spectrum_auction

development of new infrastructures could commence and the "internet" space as we know it would drastically change, where exists the possbililty of keen advertising fully supporting this environment providing 100% free "internet" to users, driving off and online sales, a more educated individual where information is at their fingertips at all times.

We may not even call it the internet but just refer to finding things as we almost do today with the term "google it", a kid will say to another "Man I reall want that new pair of Duncan's, I wonder if anyone has them on sale?" the other kid says "I don't know, let me look it up"

Where "look it up" is referring to the "internet" search he/she performs through a voice command which parses the sentence and brings a comparison of online and offline retailers with breakdowns of location, price, reviews, etc...