Search patterns will change as Yahoo pushes out new features, but so will the method it relies on to monetize ads. The company plans to roll out several enhancements to its online and mobile search engines on Thursday, as well as programs that package ads.
Android and iPhone users will gain faster search results through HTML5 technology. Rich content on entertainment, finance, and local topics is served up specifically for high-end mobile devices.
When the features go live, consumers will discover shortcuts to find movies, musical artists, celebrities and news topics organized as images, articles, videos, tweets, event listings, and ratings. They also provide quick and easy ways to purchase movie or concert tickets while searching.
A Web app for Netflix -- the first in a service of "quick apps" -- provides a way for members to add movies to their list from the Search results page. In the coming months, Yahoo plans to launch additional apps that change the search paradigm from finding to doing.
The Sunnyvale, Calif. company will attempt to determine behavioral changes in consumers that Chi-Chao Chang, Yahoo vice president and general manager of global search business, expects will lead to better monetization of ads -- not only for Yahoo, but advertisers, too. Yahoo also began repositioning and bundling search advertising tools, and building monetization platforms for advertisers looking to reach consumers across the company's network of properties.
Yahoo will package "personalized ad footprints" for advertisers geared toward reaching consumers who tend to click on search ads through features like More Sponsor, which launched in April. More Sponsors adds links at the bottom of search results on Yahoo, offering the ability to view more Sponsored Search ads related to their original search query. The tool taps into click-through and search history to determine the quantity of ads to bring up a list of Sponsored Search ads.
The sponsored search tool Rich Ads In Search also becomes part of the package, which Yahoo began testing in February 2009 with Pedigree, Pepsi and Esurance, along with a select number of national brand advertisers.
Chang says Yahoo has begun to audit sales relationships with top advertisers for both Yahoo and Microsoft by digging into data, looking for search marketing ad opportunities. This means that Yahoo is digging through the data looking for valuable keywords that don't sell. The keywords are packaged to make it easier for agencies and brands to find "opportunities" in clicks that go unsold. "There could be 8,000 clicks in the package supported by all good keywords targeted at specific demographics," Chang says. "It's kind of like a nutritional label you might see on a product in the supermarket."
Forrester Research Principal Analyst Shar VanBoskirk believes Yahoo is trying to both package up what it already offers in a different way and dig deeper into the data collected across the Yahoo network of sites. "I think the 'search experience sponsorship' is a good idea, and it could go a long way toward getting brand advertisers to at last invest in search," she says.
For Yahoo, the future of search pulls content from multiple sources that sometimes won't require consumers to leave the search engine query page to complete the transaction. "We'll evaluate each on a case-by-case basis," says Chang.
Chang believes Yahoo can turn problems into opportunities by striking a balance between consumers and advertisers. Similar to the motto "you get what you pay for," he acknowledges that CPCs will rise, but the quality of the clicks and conversions become more relevant supported by the features and Microsoft.
Think basic economics. Declining to elaborate on possible increases, Chang says advertisers will operate on one platform rather than two, which typically creates competition. "The quality of the clicks from the combined marketplace is equal, if not superior, to what the advertisers received before," he says. "So, as the PPCs rise the value the clicks deliver will increase, too."
A report published in September by GroupM Search, a division of WPP, suggests that prices for branded and unbranded keywords in paid-search ads may rise sharply after Yahoo and Microsoft combine Internet search advertising services.
Advertisers can expect an average increase of 64% above Bing's CPC prices today for unbranded keywords and 78% for branded keywords at the peak, according to GroupM. Initially, the platform merger could cause branded terms on Bing to increase by 75% on average, and unbranded by 73%. For each new competitor, CPCs for branded keywords will increase by 6.8% on average, and unbranded about 1.5%, according to the report.