Panama vs. MSN: Another Search Smackdown
Who ever thought two venerable internet giants would be scrambling to be No. 2? While Google is the undisputed leader in paid search marketing, Yahoo! and Microsoft don’t even come close. You can see it by the numbers below.
As shown in the chart, Yahoo and Microsoft trail Google significantly in market share. This pattern has been consistent over the years, with Google gaining additional market share each year.
It is puzzling to see Yahoo and Microsoft continually lose market share to Google. Both search engines have devoted significant resources to dislodging the Google paid-search juggernaut. Perhaps Yahoo’s management made the wrong judgment call in waiting too long before improving its badly outdated GoTo-Overture interface. Microsoft, on the other hand, was not only late to the party, it waited too long before redeploying resources to counter Google dominance. While both firms struggle to introduce new technology, it looks like Google grabbed all the talent.
Here’s how these two firms compare against each other.
Next: A Brief Industry Analysis
When Bill Gross first introduced GoTo — which became Overture and is now Yahoo Search Marketing (YSM) – no one in the search industry took this business model seriously, except the advertisers. Despite harsh criticism for sullying the unbiased, pristine SERPs, the pay-per-click advertising model gained traction, and within a few years, paid search owned online marketing.
Logically, Yahoo should be leading the pack since it came out first and had more experience. However, Google joined the party reluctantly, ate Yahoo’s lunch and continues to dominate the $15 billion paid search industry.
Google’s secret weapon is continuous product improvement and fierce customer loyalty. There is no disputing the fact that once Google gained its reputation for relevancy, users have remained tenaciously loyal, despite the fact that relevancy is no longer golden. This monumental branding feat has proven hard to beat. As market share continued to rise, Google dominance became a self-fulfilling prophecy.
Now that Panama is fully functional, and adCenter has been established for more than a year, here is how the two platforms compare.
Next: How The Two Platforms Measure Up
Return to A Brief Industry Analysis
Reach — Major Advantage: Yahoo
As shown in the chart on Page 1, Yahoo outscores Microsoft in search market share by more than 50 percent, so advertisers are going to spend more on Yahoo Search Marketing. Additionally, adCenter has not been running as long, so there is not much history for advertisers to rely on.
Top-Level Campaign Settings — Advantage: Yahoo
Although Yahoo’s campaign management platform is less than six months old, its years of paid search advertising experience have given it a true advantage in designing the new Panama platform.
Panama features an interactive dashboard that lets you quickly take the pulse of your PPC campaigns. Without having to run a single report, you can see what’s happening at the campaign, ad group and keyword level. You can also view trend line charts for indicators like ad impressions, costs and conversion rates across different time periods.
Yahoo has essentially “flattened” hierarchical campaign data so you can quickly get to the data from any level. Once you decide what issues need your attention, you can quickly drill down within a click or two and take action. This is a very clever user interface.
Microsoft’s adCenter has a good, clean and logically organized campaign interface, which most companies managing their own ad campaigns will find easy to navigate. For anyone managing larger, more active campaigns, however, adCenter’s performance can be a source of frustration. Common repetitive tasks like updating keyword bids still take too many keystrokes and sluggish screen loads to accomplish.
Account Structure — Even Score
Both Microsoft and Yahoo are using essentially the same campaign/ad group hierarchy that Google has made into a standard. This is good news for advertisers because it makes porting Google campaigns onto Yahoo and Microsoft adCenter easier, and it simplifies reporting across networks.
Next: Ad Copy and Rotation
Return to How The Two Platforms Measure Up
Ad Copy and Rotation — Advantage: Yahoo
The advantage for ad copy goes to Yahoo simply because it allows 40 characters in ad titles, while Microsoft’s adCenter (and the big-G, for that matter) allows only 25-character ad titles. While many advertisers choose to write one ad that fits all three networks, Yahoo allows clever copywriters to gain advantage with longer, and presumably better, titles.
Yahoo offers more flexibility in managing multiple ads. You can easily turn ads on/off and set them to display on even rotation for A/B testing. Both Yahoo and Microsoft offer an ad optimization feature whereby your best ads, i.e., ads with the highest clickthrough rates, are displayed more frequently.
Microsoft has an interesting implementation of dynamic keyword insertion (DKI) that is worth exploring. DKI can make ads more relevant by inserting the user’s search term into the ad on the fly. Microsoft takes DKI to a new level by allowing insertion of text into the ad title, ad text, display and destination URLs, plus two additional parameters for even more customization.
Content Targeting — Advantage: Yahoo (Going, going….)
In a quest for more clicks to sell to its advertisers, Microsoft recently began a U.S. pilot of its own content advertising network. The pilot uses the same targeting controls for dayparting and demographics as those described below. Text ads are initially appearing only on Microsoft-owned properties with other formats and web properties to be added over time. While Yahoo currently holds the advantage in this area, look for Microsoft to start closing the gap in 2007.
Ad Formats — Up For Grabs
Today, all the action is in text-based ads. Yahoo plans (discussed in Search Smackdown: Google vs. Yahoo!) “all kinds of ad formats,” including mobile and TV. Microsoft is new to paid search, but not to online advertising. It would not be a stretch to assume it will bring its broad experience with display, video and video-hyperlink ad formats into play for adCenter advertisers.
Editorial Process — Google
Okay, okay, we know this is supposed to be comparing Yahoo vs. Microsoft. The problem is that while Yahoo and Microsoft continue to enforce stricter editorial policies in the quest for perfectly relevant results, Google is making billions at their expense. Yahoo has quickened its editorial review process considerably with the Panama release. Microsoft reviews keywords before they go live.
Agency Master Accounts — Even Score
Yahoo and Microsoft both offer a master console to qualified agencies, allowing them to log in once and work on any of their client accounts. Both companies offer excellent telephone support and special consulting services for their agency clients.
Matching Options — Advantage: Microsoft
Microsoft offers standard match type options, following Google’s lead by offering broad, phrase and exact match types. However, it does not currently expand broad matches to include similar terms. Microsoft treats plurals as separate words. It is puzzling why Yahoo does not.
Negative keyword match implementations are as different as night and day between Panama and adCenter.
Yahoo lets you set 50 universally excluded words at the account level, and another 50 at the ad group level. This approach is straightforward and easy to manage.
Microsoft’s negative match offers greater flexibility because you can set negatives at the keyword level, but why did it set a one-byte limit on the negative word list? How many words can you fit into 1,022 characters, including spaces? IT guys will love this anachronism. It’s a head scratcher for the rest of us.
Next: Targeting Options (Dayparting)
Return to Ad Copy and Rotation
Targeting Options (Dayparting) — Microsoft in a Walkover
Dayparting is the ability to set your bids based on time-of-day and day-of-week. Yahoo does not currently offer this feature.
Microsoft did a good job of implementing dayparting. You have the flexibility to schedule your ads and to adjust bids at different times of the day or days of the week. To its credit, Microsoft even bested search leader Google on this one by basing the time of day on the location where the user sees the ads. So if you are trying to reach a lunch-time user anywhere in the country, you only have to select a one-hour setting. On Google, for example, you would have to set your ads to run from 12 noon (EST) to 3 p.m. (EST) to reach lunch-time users in California. Kudos to Microsoft for its elegant approach to dayparting!
Targeting Options (Demographics) — Microsoft in a Walkover
Microsoft is the only search engine to currently offer demographic targeting for search ads. If your perfect customers are 35-44-year-old women, then you can set your bids so your ads get better positions when this demographic group is clicking around. Microsoft has years of Passport and other data it is now putting to use without compromising personally identifiable information. Although Microsoft does not disclose how many searches it is able to demographically segment, we generally see better conversion rates when targeting options are turned on.
Targeting Options (Geo Targeting) — Slight Advantage: Yahoo
Yahoo’s implementation of geo targeting is intuitive and easy to set up at the campaign level. A handy map highlights your DMAs or states/provinces choices as you click each area.
Microsoft’s geo-targeting implementation may not be as sexy as Yahoo’s, but it is still a solid offering. In adCenter, you implement geo targeting at the ad group level, not at the campaign level. This makes a great deal more sense to advertisers who have distinct product lines but different marketing programs state-by-state.
Trademark — Gold Stars for Everyone
Both Yahoo and Microsoft take strong positions to protect their advertisers’ trademarks. Neither permits competitive bidding on trademarked terms, nor the display of ads that infringe on trademarks. They both take prompt, aggressive action on trademark claims. As with any trademark protection, it is up to the advertiser to report instances of trademark infringement. Affiliate marketers may not be so happy with this arrangement, especially the legit ones who have to take extraordinary steps to get their ads and keywords accepted.
Power Tools — Advantage: Microsoft
Other than offering pretty decent keyword generation tools, neither Microsoft nor Yahoo are big on stand-alone productivity tools like those offered by Google.
Within adCenter, Microsoft’s keyword suggestion tool gives you a demographic profile of searchers, which can be helpful in many ways other than building keyword lists. On its related adlabs.microsoft.com site, Microsoft shows off early versions of tools in development, all of which are fun to look at, but none are that useful for everyday campaign management.
Reporting — Advantage: Microsoft, But Not For Long
The reports available in Yahoo Panama’s interface are absolutely stunning. Interactive charts let you analyze many campaign performance issues online, without having to download and manipulate in Excel or other tools. That said, there are many common reports that are just not available in Panama, yet. Microsoft’s reporting interface is intuitive, gives you plenty of reporting and scheduling options and runs quickly.
Relevancy Ranking — Advantage: Yahoo
It is refreshing that PPC advertisers have something new and positive to obsess over instead of click fraud. Quality Indexing and ad relevancy ranking are now hot topics of conversation at SEM cocktail hours. Yahoo is doing an exceptionally good job of educating its advertisers on the why’s and how-to’s of quality improvement in its system.
While Yahoo doesn’t disclose exactly how it weights relevancy factors, it does provide feedback in its reporting dashboards on a five-bar scale, so you can see at a glance which of your ads are considered most relevant and which need work.
Conclusion
Yahoo’s search traffic volume — and the new Panama interface — have kept it solidly in second place behind Google. However, with Microsoft deploying tremendous technological resources into paid search and making strategic acquisitions, it may be angling to simply take over Yahoo rather than overtake them in second place behind Google.