There is much debate in the search engine marketing industry over the implications of the Google/Yahoo deal. Arguments regarding the pros and cons have flooded industry publications, and it seems everyone has an opinion. In order to properly formulate an opinion, let's first consider the characteristics that make paid search so attractive to advertisers:
• Profitability - Ads are only served to those actively searching for keywords relevant to your business. Naturally, this is more profitable than most other forms of advertising.
• Tracking/Measurement - Online advertising in general enables granular tracking of multiple metrics. As the industry has matured, so too have the analytic capabilities of the various tools search marketers leverage to optimize search campaigns.
• Targeting - Based on the in-depth analysis of performance, multiple variables can be adjusted to refine your reach.
While this list could go on, these are the three main attributes that are jeopardized by the potential Google/Yahoo deal.
Profitability - The bottom line is simple. If Google makes more money and Yahoo makes more money, then where is it going to come from? The funds will come from advertisers. Regardless of how much you pay today on one engine versus the next, the increased revenue ultimately comes from the advertiser. And just as Google and Yahoo will profit from these cost increases, so will SEM agencies that charge a percentage commission on media.
Tracking/Measurement - Search marketers love data and the specificity with which they can optimize their ads. The potential partnership removes a level of granularity marketers have become accustomed to leveraging. The Google search user differs vastly from the Yahoo search user. Thus, the same keyword may perform differently on Google than it does on Yahoo.
Targeting - Based on the performance metrics tracked, variables are optimized. This may mean utilizing different ad copy, landing pages and bidding strategies on Yahoo than on Google. Google has stated that advertisers will be able to see which ads served on Yahoo through the HTTP referrer; however, this is highly labor-intensive work for advertisers and will remove the ability to target Yahoo placements with different variables than those used in Google.
Whether or not this deal will ever come to fruition remains to be seen. If it does, there are steps Google will need to take to avoid setting advertisers and the industry back, beginning with addressing the very things that took us forward.