Google, Yahoo Advance On One Another's Turf

  |  April 17, 2007   |  Comments

As Yahoo basks in its search ad improvements, Google's deal to buy DoubleClick provides major inroads with brand advertisers.

On a day dominated by discussion of Google's planned acquisition of DoubleClick and its big radio deal with Clear Channel, the marketing world has understandably overlooked upbeat developments at Yahoo that speak volumes about changes underway at both companies.

RBC Capital Markets and Search Ignite released a report today finding Yahoo's share of paid search budgets has stabilized as brand marketers derive benefits from the Panama search marketing platform in the form of reduced per-click costs. Yahoo also expanded its relationships with newspaper publishers, allowing advertisers to place ads across a larger group of newspaper sites in local markets.

Steady optimism from Yahoo's search advertisers, coupled with Google's bombshell DoubleClick deal, suggest the rivals are making strides toward conquering one another's core strengths. Panama has wowed the search marketing community, which in turn is rewarding the company with increased spending. And not a moment too soon, as Google's latest move positions it for an influx of brand ad dollars it's long been seeking, and that Yahoo has long enjoyed.

"I've been trying for five years to get Google to report to me how many people saw a paid search listing and didn't click, but later took an action," said Rick Corteville, executive director of media at interactive agency Organic, during a joint conference call with investment firm UBS yesterday. "That's one of the ways we report branding. We know 80 percent of the impressions we served don't result in an immediate action."

He added, "If Google can provide that level of information, to not only have more data in one place, but also tell about the brand impact you're having, that's going to be a compelling story."

Corteville also extolled Panama's virtues, particularly in regard to customer service, an area in which many give Google low marks. "We've been really impressed with the amount of dedication to the agency community," he said. "We've been increasing our spend, not exponentially, but in the 10 to 15 percent range since the launch, based on the increase...in performance.

David Smith, CEO of media agency Mediasmith, agrees Google and Yahoo are successfully laying siege to each other's turf. Like Corteville, he says proof of Google's dedication to brand advertisers will be in how evenly the company decides to report on the share of influence attributable to customer contact points in various channels. Smith cites providers such as Blackfoot and Theorem as innovators in such reporting methods, sometimes called "multiple attribution protocol." He says Doubleclick has been developing such technology, but embracing it is a risky proposition for Google since it has the potential to cut into search revenues.

"Deploying DoubleClick technology may actually de-value the search click," he said. "They very much are going to need to be involved in the ad sales on the graphical [side] to make this up."

To boost ad sales, Google must reassure DoubleClick publishers it has their best interests at heart. DoubleClick's largest customer, AOL, already uses Google to provide search results and monetization on its network. The impending acquisition of its ad serving partner by its search partner means the Time Warner unit's entire ad sales and trafficking system will reside within a single company.

"It's one thing for AOL to serve up Google ads. It's another thing for Google to have access to what works on AOL and what doesn't," said Smith. "They would have the keys to the kingdom."

While few advertisers appear to see direct conflicts for their own campaigns with Google owning DoubleClick, several expressed wariness about the amount of power the search giant will hold when the leading ad management firm is in its arsenal.

"We all are looking for a single interface when it comes to data," said Andreas Roell, president and CEO of Geary Interactive. "Are you willing to hand this over to an entity that is more than just a technology provider, an entity that is an ad network at the same time? It goes back to the question of trust, which has yet to be established."

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ABOUT THE AUTHOR

Zachary Rodgers

Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects. 

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