• by Laurie Sullivan  @lauriesullivan, February 20, 2009

Yahoo has been "quietly testing" the sponsored search tool Rich Ads In Search with a select number of national brand advertisers, according to Tim Mayer, Yahoo VP for search monetization and distribution.

The advertisers--including Pedigree, Pepsi and Esurance--have seen click-through rates increase by as much as 25%. The pay-per-click (PPC) service for video ads appears to increase brand exposure and influence higher conversion rates, according to those who have been testing the tool.

It took nearly a year to create and test the Rich Ads In Search, but Yahoo has finally unveiled the program. Barry Schwartz at Search Engine Land said he began noticing the precursor to the tool nearly a year ago in March 2008.

Pedigree, Pepsi and Esurance have been testing the 30- and 60-second video tool, along with digital agencies such as Razorfish. Mayer said the visual ads influence consumers to click through more often from the ad. This week, Yahoo opened the service to other brands.

Mayer said it takes "advertisers and consumers to the next evolution of paid search advertising by increasing the interactive experience and making paid links more engaging."

The PPC tool enables advertisers to post images and video aimed at increasing the brand's impact in the search query. "People can now add interactive elements to sponsored search such as a video, search box, or deep links," Mayer said.

Pedigree has added video to its campaigns, for instance. The ads link to relevant pages on the brand's Web site, a strategy that can help drive conversions directly from the Yahoo search query pages. And a box within the listing allows users to search for products or a store location without navigating away from the search query. Esurance's listing allows users to enter their ZIP codes from the results page for insurance quotes.

Developed in Yahoo's search and advertising group, the tool came from experimenting with SearchMonkey, Yahoo Search's open developer platform. It's a framework for creating small applications that Yahoo uses to enhance search results with images and video. The program gained momentum from internal eye-tracking studies which suggest that consumers tend to spend more time looking at video rather than still pictures or text links.

The biggest challenge, however, came from understanding how consumers would interact with the ads and how to integrate them into the "search experience." Mayer said engineers created a small thumbnail of the video. The viewer opens on the search page. It gives the advertisers added "real estate," so consumers need not "squint" to see the ad.