Last week, terrified by the universality of the belief that Google is going to the moon, we invited readers to share any fundamental concerns they had (“Calling All Google Bears.”) One of the most persuasive arguments was the perennial concern about keyword pricing: Specifically, that pricing for Google’s keywords had reached the point where advertisers’ ROIs on Google were lower than on Microsoft and Yahoo, so Google might begin to lose search share.
We’ve run this concern by many SEMs over the years, and we immediately did so again. One SEM said they “weren’t necessarily seeing this.” Another said that Google’s ROIs were indeed lower, but this was largely irrelevant, because Microsoft and Yahoo delivered such pitiful numbers of qualified leads that the SEM had to use Google. (See: Google Bear Case 1: ROIs Dropping)
Over the past week, we’ve pinged other SEMs about this issue. In general, they concur: Google ROIs are often lower, but traffic volume is far higher, and clients would never consider not using Google. Here are some representative quotes about this issue, as well as the state of MSN and Yahoo:
SEMs ON GOOGLE, MSN, and YAHOO
Yes, Google ROIs are Down, But They’re Still Fine
I think the short answer is yes [keyword pricing has hit the point where ROIs on Google are lower]. The longer answer is for those that continue to put in the effort (not rely solely on tools) to develop good keyword lists, ad copy and bidding strategies, Google’s ROI is fine, its just not easy any more. Many of our clients have seen a decline in their Google ROI, and for more generalized terms, other engines have lower competition, and so, by definition, have lower CPCs leading to higher ROIs.
In addition, I believe that as Google, et. al. makes it more difficult through quality score and other mechanisms, the faint of heart are bailing out of SEM, yet need to find similar ROIs, and therefore are doing a better job with alternate forms of online advertising.
Google ROIs are Lower, But You Absolutely, Positively Have to Be There
Almost across the board (based on vertical) other engines show a better ROI than Google, but 1) it’s not enough to matter (usually); and 2) volume stinks anywhere outside of Google. In addition, it is still almost like swearing to suggest another engine to most clients. I can’t tell you how many times I have gotten the evil (stink) eye when I uttered the words Yahoo and MSN. For example:
- One client grades their entire search program on how well they do on Google (CTR, Conversion Rates, etc)
- One client contractually forbade us from running on anything but Google
Yahoo’s Volume Sucks, and They Won’t Even Return Your Calls
One client asked to move 25% of their spend to Yahoo and it took months for Yahoo to just call us back (this was a large publisher that Yahoo works with directly on other projects). And, on more than one occasion, we have run campaigns on Yahoo that perform better than Google, but there is little to no volume.
Yahoo’s Volume is Irrelevant for Publishers, Too
Unfortunately, from a publisher’s perspective, Yahoo is very nearly at the point where it doesn’t matter. After years of careful SEO attention, our search return positions are very similar between the two search engines, and even the mix of keywords we’re seeing is very much the same. However, yesterday Yahoo gave us a disappointing 1,537 visitors, while Google provided 26,644 visitors… more than seventeen times the traffic. In addition, Yahoo webmaster support is light years behind Google’s… and the search engine that gives webmasters better tools will ultimate have better results.
In Practice, There’s Really Only One Search Engine
Getting our brand managers to consider paid search at all has been a hurdle, but we finally broke through. We’re there. But, only with Google.
Here’s the rough part if you’re in Yahoo’s shoes.
As a client if you’re only going to test one search engine to start, you sort of have to do Google. It is hugely dominant, and it’s the one everybody’s heard of and wants to try.
And if Google delivers results? It seems crazy not to buy some more Google.
The danger is that this sort of self-reinforcing loop creates (has already created?) a search monoculture. Monocultures stifle innovation, and it puts too much potential pricing power into one company’s hands.
Despite these anti-monoculture sentiments I must confess I am part of the problem. It’s the only paid search we buy today, and it’s also the only search engine I use. Once I installed the Google toolbar, it was all over. Totally convenient, always delivers, and it’s free. How do you fight that?
Oh, Come On: Yahoo’s OK, and You Can Find Good Results Off GoogleA solid search strategy always includes the top engines along with appropriately managed placements in 2nd tier (3rd tier?) sites. Usually when firms are “just buying Google” it’s a lack of resource issue or an odd (and unfounded?) phenomenon I like to call Google Goggles.
I’d agree that if you are wearing Google Goggles, you won’t find the volume anywhere else, but then again, you are probably missing a great deal of searchers and buyers.
There are many countries around the world where Google has yet to (and may never) dominate. While the U.S., France, Germany and UK show very strong numbers, APAC is still pretty open, and Yahoo is the clear leader in Hong Kong.
Blended search components and search technologies are starting to move the meter a bit, but we are still in the early stages. Yahoo made some very smart moves with opt-ins (as opposed to force feeding) blended search features. The mission of search blends or mash-ups like this help the search sites monetise some of their high priced assets like YouTube and Flickr while providing a “better search experience.” Top line analysis (comScore) of user adoption and % of ads shown of the top 3 search sites shows fewer, more targeted ads in place with higher CTR’s.
MSN Good Returns, No Traffic. Yahoo OK Now, Still Low Traffic. Google’s Cost Up
Generally speaking, I get better returns on MSN just no where near the volume. My costs have gone up in Google most likely due to the change they made in the summer regarding the top search position. Yahoo’s ROI slumped when Panama first turned on to the point where I was below an acceptable level, but it has been getting better as of late. It is still no where near Google’s volume, but getting close to Google’s ROI. I think another driving factor in Google is more spending on their content network. Content is a completely different animal and even though you can pay on a CPC for your keywords, it requires a different strategy.