Vertical Search Auctions on Portals Coming Soon?

Will keyword bidding on Yahoo and MSN — the search players with portals — soon be carved into optional, more expensive vertical niches? It appears so.

At a lunch Yahoo threw this week to announce its new personal finance section , I asked a number of Yahoo executives if they’d considered a marketplace in which, say, a financial advertiser could bid for two tiers of keywords: one on Yahoo Search, and another higher bid for contextual search ads appearing only on search results within the personal finance section.

“It’s certainly something we looked at,” said Tanya Singer, director of product development, who spearheaded the project.

That amounts almost to a confession. With the recent introduction of Panama on the Yahoo side, and upgrades scheduled for MSN’s auctionplace interface, the content portals would have to be nuts not to consider enabling more vertical SEM buys.

Google’s not a portal, but it could certainly play along with buys aimed at specific sections such as Book Search or local, though that’s a mushier landscape given the precision to which a local buy can already be targeted.

The end effect would be more targeted advertising, to be sure. But also more complicated search advertising, which only the more sophisticated clients are ready for. SEMs would also have to rush to tweak their proprietary bid management and metrics applications.

Still, it seems the move is inevitable. The only question is, when? Yahoo’s promised to get back to me on this.

I’ll keep you posted.