The Digital Lookout

In a memo to its partner agencies yahoo has announced changes to its commission structure which will see it follow Google’s lead and reduce the amount of Agency commission from January 1st 2009.  It is not going as far as Google in removing commissions completely but it will see a cut of 1% for the majority of agencies but a potential hit of 6% for unlucky agencies which fall into a specific band with a potential loss of all commission for the really small spenders.

At present agencies spending between £20,000 and £79,999 receive a rebate of 5% from Yahoo and anyone spending over £80,000 receives the maximum 10% commission on search spend.  The January changes will see agencies spending between £50,000 and £99,999 receive 4% rebate and anyone spending over £100,000 9%.  This means the removal of commissions for agencies spending less than £50,000 a month and a hit of 6% for those who fall between the £80,000-£100,000 monthly spend bracket.

The announcements come in the same week that Yahoo! has announced it will be closing six European offices in the coming 12 months in a bid to cut costs.  Potentially suggesting that the two decisions are linked in a company wide profitability drive.  After all, agencies will be so concerned with losing their Google BPF that they hardly notice the Yahoo change right?

Its a disappointing step from Yahoo who could have used the Google BPF removal as a tool to grow their market share.  Either by simply pushing agencies on the message that they are still offering 10% or even making the bold move of increasing the commissions to further incentivise search agencies to use their service.  After all, they still offer 15% on display advertising placements so why not search as well?

Yahoo has been failing to eat into Google’s market share for a long time and it has been becoming more and more apparent of late that a merger with Microsoft might be the only way we will see true competition in the paid search market.  But this was a prime opportunity to steal a few more ad dollars from Google and one, in the current economic environment, they probably couldn’t afford to miss.

If Yahoo had been brave and increased their commissions, I for one would have been looking for way to spend more pay per click budget with them but now they have reduced them, I certainly wont be increasing PPC spend with them in the New Year.  I think this can safely go down as an opportunity missed for Yahoo, and could even been seen as a signal of intent not to put up a significant fight against Google in the field of Pay Per Click.

I spotted something today in the Yahoo Search results I had not seen before.  Now this isn’t to say it hasn’t been around for a while as I can confess to rarely using Yahoo and relying on Google for my search fix mostly because of my iGoogle homepage.

What I found when I searched for virus protection specialist bullguard were notifications in the natural search listings marking the site which had potentially dangerous downloads and spyware potential.  The site in question was Kazaa which was listed twice in the SEO results, both listed accompanied by the message “Warning: Dangerous Downloads“.  This is the first time I have ever seen this warning before in the search results and I would be interested to find out whether it is a manual label on specific sites or if it is picked up automatically in some way.  Either way it is great for the user to see such warnings and catastrophic for the site as I certainly now I would be steering clear of clicking them.

yahoo show spyware warnings in seo results

Kelkoo has today emailed all its advertisers to inform them that they have been acquired by newly formed venture capitalist company Jamplant.  In a slightly surprising move Yahoo! has relinquished the comparison site but will maintain Kelkoo as the comparison engine behind Yahoo shopping, cars, finance and travel.

This is a strange move by Yahoo! who purchased Kelkoo for $576 M just 4 years ago.  With comparison engines a key element of unviersal search and Google placing more and more emphasis on the product search with the introduction of plus box functionality in PPC the sense of this move by Yahoo could be questioned.

Whilst they may maintain they still have access to the functionality and you would hope this is part of the deal.  I do worry what happens in the future if the relationship sours.  In the current economic climate Yahoo will be happy to relinquish the overhead but it may come back to bite them in the future if they go down the same route as Google has.  What do you think?  Shrewd move to cut costs, or mistake they will regret in the future?

Google announced yesterday that it was pulling out of the agreement with Yahoo which would have allowed them to display Google Adwords listings on Yahoo search results in the US.  The announcement comes in the face of a potentially lengthy and costly legal battles with competition regulators which Google has decided would “distract the from their core mission”.

In Yahoo’s response via email to it partners they reassured PPC advertisers that, whilst they were disappointed by the announcement, it would not prevent them becoming an “ever-stronger player in online advertising”.  and reaffirm their strength in certain sectors by quoted their positioning across selected news verticals.  A clear attempt to say “don’t give up on us yet!”

In a further twist, Yahoo! CEO Jerry Yang has come out and reverted on his original defiance on a sell out to Microsoft by claiming that he was open minded about a potential deal with Microsoft having been bitterly opposed to such a deal when originally proposed.  Its funny how he has changed his mind immediately prior to the Google announcement!

So its back to square one in the search engine battle for supremacy with no deals on the table and everyone working independently.  But for how long?  Yang’s announcement is bound to start the Microsoft-yahoo rumour mill off again and it is probably more likely to go ahead after yesterday but who knows?  I’m sure there will be more twists in the tail before the saga ends.

In an attempt to combat the impending slump in gambling revenues following Google’s change in gambling policy Yahoo! has taken the unusual step of REMOVING some of its advertising listings from key sports keywords.  A search for football betting on Yahoo! UK will now return just 4 paid search listings at the top of the SERP and 2 at the bottom with the right hand inventory devoid of PPC ads, replaced only by universal searchelements such as image search results and Eurosport news results. This seems a rather strange attempt to reverse a decline in revenues by removing the elements that generate the revenue in the first place! The explanation given by Yahoo! is that this is a beta trial to determine whether the streamlined user experience out-ways the loss in revenue.  And the impression is their appearance will be done at a keyword level determined by whether the revenue out-ways the experience for that particular keyword. Ill be honest, I don’t think this is going to get out of beta testing.  Gambling has been one of Yahoo!’s key sectors and with the Google changes likely to see advertisers diverting their PPC funds away from Yahoo! naturally anyway.  The effective removal of available positions on page 1 will make pay per click marketers consider whether it is worth bothering with Yahoo! at all if they cant afford to be in the top 4 slots. Well done Yahoo! kick yourself while you are down!

Yahoo Removes PPC Listings for Gambling Keywords