Has Yahoo Search Marketing Become A 'Dog'?

Years ago, when I was in business school, I learned about the Boston Consulting Group's Growth-Share Matrix. The matrix is designed to help businesses determine which business units are ripe for growth and which should be spun off or shut down. Those that fall into the latter category are called "dogs" in the matrix.

The impending Microsoft-Yahoo Alliance, along with questions as to whether Yahoo even cares about search any more, made me start to think that Yahoo's paid search division (Yahoo Search Marketing, or YSM) may have become a dog.

Since Microsoft launched Bing last summer, Yahoo has been losing search market share to Bing. A direct result of lost market share in search is lost market share for PPC. Lower PPC traffic, combined with ongoing issues with the YSM interface, continues to frustrate PPC advertisers.

On the Search Engine Watch Forums, a 5-year-old thread titled "10 Reasons Yahoo Should Kill the Direct Traffic Center" was recently revived. (The Direct Traffic Center was the predecessor of today's YSM user interface, or UI.) The list actually ended up with 35 reasons once all was said and done. While many of the issues have been resolved over the past five years, a surprising number of them still exist:

  • "DTC (Direct Traffic Center) is excruciatingly slow." While the current interface is faster than the DTC of old, it's like watching grass grow when compared to Google AdWords and Microsoft adCenter. That's probably why adCenter will be the platform used by the Alliance.

  • "Deleting keywords and phrases does not always do so." Five years ago, a glitchy UI was the problem. Today, it's Yahoo's "auto-optimization feature." If you aren't careful, you may find not only keywords reappearing in your accounts, but brand-new campaigns and ad copy that you never knew existed.

  • "DTC reports are a joke. Even when they are working, they don't always give you the information you need. In other words, 'NO CUSTOMIZATION!'" Little has changed here. True, more report types are available now, but they lack the filtering and customization options found in AdWords and adCenter.

  • "Inconsistent, pointless editorial policy." In the forum thread, advertisers (myself included) complained that simple changes to ads, such as a price, resulted in editorial declines for ads that were previously approved. This happened to me just last week.

  • "Please fix the Account Balance emails. Even if I have $8,000 in my account, I will get a random email stating that "my account may be getting too low" ...yet, when my account is actually low, I get nothing." Yep, still happening.

Several advertisers also commented about low-quality traffic from search partners. Five years ago, it was nearly impossible to exclude sites -- requests had to go through a YSM rep and weren't always honored.

Things have come a long way in that regard in five years. Not only can you exclude up to 500 sites, Yahoo now provides a "Network Distribution Report," breaking out performance on Yahoo properties and search partners separately. Yahoo also has the option to opt out of search partners.

Back in December, I did just that for one of our clients -- I opted out of Search Partners. Their YSM impressions dropped by more than 50 percent, but traffic only fell by 14 percent. Best of all, the client's conversion rate from Yahoo improved by about 30 percent. So, search partner quality is still an issue -- but it can be dealt with.

Stack all of this up next to the innovations in Google AdWords in the last five years: Conversion Optimizer, Placement Performance reports, Search Query reports, Content Network enhancements, View-Through Conversions, Search Funnel, AdWords Editor, a vastly-improved UI... It's clear that Yahoo hasn't even begun to keep pace with the PPC times.

If I had to guess, I'd bet that if Yahoo executives took a look at all of these elements (market share, UI issues, quality) next to the good old BCG Matrix, they would put YSM smack dab in the "dog" quadrant.