Yahoo!'s Overture Looks At Simpler Models to Court Advertisers

  |  November 3, 2004   |  Comments

More pricing models, including simpler ones, will bring more advertisers online, according to Overture's president.

JERSEY CITY, NJ -- Overture is considering offering advertisers a flat-rate pricing model to make paid search simpler for small- and medium-sized businesses, according to Ted Meisel, president of Overture and SVP at Yahoo

"We're focused on simplifying from several directions, and that's what it's going to take," he told an audience at the Kelsey Group's Interactive Local Media conference today. "We need to help marketers to think about their objectives, not on the keywords they're picking. Not whether they're bidding $0.14, but whether they're meeting their objectives. We're entertaining subscription models. It's going to take all of that."

Some of the company's reseller partners, such as Bell South, already sell Overture listings via a flat-rate subscription model. Others, like Affinity ValueTraffic, Interland EzClicks and Dex Web Clicks offer flat-rate packages to their customers via a partnership with media broker SME Global Solutions.

Meisel said that local search is growing rapidly, but growth could be enhanced if search companies would realize that not all small businesses are unsophisticated, just as not all large businesses are online-savvy.

"To bring the masses online you're going to need to have more models -- some of them simpler," Meisel said. He noted that Overture will also continue to develop its core pay-per-click model.

Online advertisers fall into two distinct categories, Meisel said. "There are those who like technology and are drawn to the medium, and there are those who want people to do it for them. We've found a large and growing base of businesses interested in doing it themselves, and another market that values direct help, on the phone or in person."

It accomplishes this high-touch model through 100 channel sales partners in its Ambassadors program, and has no immediate plans to develop an extensive sales force on its own, he said.

"We're pleased with the way the pay-per-click model is developing, and -- through partners -- with the way the subscription model is developing," Meisel said.

Another part of Overture's effort to court advertisers is to ensure there's an audience to view the ads. Yahoo SVP of Search and Marketplace, Jeff Weiner, noted that small- and medium-sized business owners are also consumers, and are likely to change their advertising habits as their own media consumption patterns change. Weiner said the company has seen success with consumers with its multi-channel ad campaign, launched last month when it took its local search product out of beta after just 8 weeks.

"With regard to driving traffic, it has proven very effective," said Weiner.

The online component consists of ads and integration within the Yahoo network as well as ads on other entertainment sites. Offline ads include print ads in alternative weekly newspapers, and radio spots and billboards in strategic markets.

Yahoo generated quite a bit of media buzz by setting up interactive bus shelters in New York, Los Angeles and San Francisco where people can search for local businesses, then view and print a map in the bus shelter, said Weiner.

"I don't know if it was a slow news period or what," joked Weiner. "But we got quite a bit of play on local TV newscasts with that."

Weiner believes that the success of Yahoo's local search stems from its integrated SmartView mapping features. "Search through a query box that displays a list of text results is only one paradigm. If you think about completing a task on a local basis, chances are you need to know where it is, and you need to know how to get there," he said.

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Kevin Newcomb

Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.

Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.

With a combination of real-world marketing experience and years of business journalism, Kevin brings to ClickZ a unique ability to deliver news and training materials that help online marketers do their jobs better.

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