Yahoo Spends $90,965 Per Day On Google Ads

Yahoo placed 102,742 ads against Google search results during April and spent, on average, $90,965 per day doing it.

Why? It’s search advertising arbitrage.

f?id=4a312aec14b9b9c700eee869&maxX=300&m

The average ad Yahoo buys on Google appears 15th from the top, often on the second page of results. That means Yahoo isn’t paying very much per click. The idea is that a Google user will click on the Yahoo ad, and then, once they reach  the Yahoo Shopping search results, click on a higher-placed, pricier ad.

It’s a strange practice, but common enough.  Pretty much most of the top 100 Google advertisers do it.

Click here or on the image to see that list, compiled by AdQuants. →

Update: A commenter sheds some light on the practice:

As someone who used to do this at Yahoo in the UK, I can tell you that the desired Margin is 30%. On average that is achieved easily, however take out brand terms (its amazing how many type “Yahoo” into Google” and its nearer 10%. Its more of a market share thing for the shopping channel.

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.