• by Laurie Sullivan , Staff Writer @lauriesullivan, April 6, 2010

As Yahoo relinquishes the backend of its paid search advertising platform to Microsoft Bing, the Sunnyvale, Calif., company continues to run into problems. So I'm taking the cue from my MediaPost colleague Erik Sass, who recently gave Google a little sympathy based on the Buzz privacy debacle. I'm asking everyone to pause for a moment to give Yahoo a little love. (Okay, that's enough.)

Along with analysts and industry executives' confidence, Yahoo's share of the U.S. search market in February fell 0.2 percentage point to 16.8%, while Microsoft's share rose 0.2 percentage point to 11.5%, according to March data from comScore.

Yahoo has begun turning more attention to display advertising, content and new advertising models. Companies do expect to spend more on both search and display advertising this year.

The Search Engine Marketing Professional Organization (SEMPO) suggests half of companies participating in the State of the Search Engine Marketing Report 2010 will increase budgets this year, but Yahoo has had a difficult time capturing a piece, though clients admit to gaining a positive return on investments for a variety of advertising campaigns, including retargeting.

The marketing agency Didit isn't actively moving clients away from Yahoo. The accounts simply don't get the same level of attention as Google accounts, according to Didit Chief Executive Officer Kevin Lee. All of the company's clients have Microsoft adCenter Bing accounts, too, so they will not feel any pain as they make the transition. "At some point, Panama will simply be turned off," he says.

Some of the shift from Yahoo to Bing gets attributed to the "lame duck" idea where advertisers believe Panama will only disappear in another nine to 15 months.

Lee says synchronizing campaigns across engines isn't always easy. That's because advertisers expanding keyword strategies or doing tests for landing page in Google get a 3% efficiency gain as a result of their efforts. They typically need to see at least a 12% efficiency gain in Yahoo or Microsoft adCenter to justify doing the same work in the other engines.

Advertisers attribute a lack of data and features to the shift from Yahoo to Google. Lee says Yahoo doesn't make all display retargeting data available in the company's Right Media ad platform. Instead, the data serves up in a separate platform, which doesn't provide enough details.

Didit wants to work off a larger cookie pool when doing retargeting, so, in part, it relies on content networks supported by search engines. Advertisers might see 5% of the click if they're lucky, so that bigger data pool become the promise that search engines can deliver. Today, Yahoo's targeting machine, Right Media, only retargets site visitors that find Web sites originating from organic searches or paid search ads, explains Lee.

It doesn't appear Yahoo built the platform for SEM agencies looking for better control, but rather for agencies that provide the service as an add-on option whose clients don't mind plunking down $1 million without finely optimizing the campaign. Some advertisers don't mind, but Lee want to have better control on pricing, which is why you can hear a spark in his voice when talking about Google's platform that provides real-time bidding against impressions.

When I asked Lee the type of changes Yahoo needs to make to improve display media retargeting, he told me it's his understanding that Yahoo has some major initiatives within display media, both within the Right Media platform and elsewhere. "Yahoo has doubled down on display advertising, including having retained the right to retarget searchers even when adCenter is serving the paid search text ads," he says.