Among the analysis of Yahoo’s new search marketing system by Reprise Media came the revelation that smaller monthly spenders have seen cost per click prices rise.
Reprise: Small Budgets Pay More With Panama
The report by Reprise found smaller Yahoo Panama clients, with budgets under $40k, experiencing an unwelcome trend. Reprise said that those clients saw CPCs increase by 5.7 percent.
This would be due to the quality-based bidding system Yahoo implemented with Panama. Revamping the paid search platform brought it more in line with how market leader Google does business. It also raised costs for smaller marketers.
Compared to Google and MSN’s adCenter, Yahoo’s CPCs declined from January to March 2007, while increasing at both Yahoo competitors. Reprise attributed that to the bidding change and to “more sophisticated and granular campaign structure” for Yahoo search marketing efforts.
Reprise was pleased to see click-through rates rise to match those it receives from the Google campaigns it conducts. However, a 5 percent drop in conversions from January to March tempered that good news; Reprise suggested this could be a normal variance, in which case conversions remained flat with Panama’s launch.
On the campaign management side, Yahoo has some work left to do. Reprise criticized the reporting capabilities in particular, calling their fixes a “cosmetic upgrade” that is “slow and inflexible compared to Google.”
Smaller clients of Panama will want to consider the warning Reprise offered regarding CPCs and managing campaigns:
Large marketers and agencies that have expertise in properly using all the campaign structure features provided are benefiting from the upgrade. Smaller marketers who either don’t have the budget to properly use these features or who are not taking advantage of the hierarchical account structures will not see these campaign optimization benefits and may actually see decreases in performance because they are competing against others who have been able to increase performance.
We expect this could lead to a small boom in business for search marketing pros who can effectively navigate Panama’s changes, and demonstrate that expertise to the small budget Yahoo search advertiser.
