Google (GOOG) already makes Madison Avenue nervous, and its proposed search ad deal with Yahoo (YHOO) isn’t going to help matters.
Now the Association of National Advertisers, which represents the likes of the likes of Procter & Gamble and General Motors, is urging the Department of Justice to go to court to block the deal, the WSJ reports. Why? Because it will raise search ad rates.
ANA wrote a letter to the DOJ warning that the deal would concentrate 90% of the search advertising market with Google, which would “diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers for high quality, affordable search advertising.”
It’s a pretty obvious point. Yahoo has said the deal would result in $250 to $450 million in incremental cash flow in its first year, and that cash has to come from somewhere. Back in July, search marketing firm SearchIgnite estimated that search ad rates will go up 22% overall on Yahoo once the deal goes into effect. That’s because while Yahoo generally gets higher rates than Google for brand keywords and the top results, Google does a better job getting higher rates for long-tail advertising.
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