Early MSN/Yahoo Post-Merger Metrics: CPCs Rise, CTRs Fall

When I wrote “Get Your Search Campaigns Ready for the Yahoo/MSN Merger,” the Search Alliance was in the preparation stages of a full Bing/Yahoo integration.

Now that Microsoft powers all of Yahoo’s search results with Bing, and we now have just two main traditional search competitors, it’s time to revisit a couple of those predictions to see what the combined marketplace means today to advertisers.

In March, I predicted that in the first few months those accounts with some established history would fare better initially due to the established account history. I also predicted that CPCs would be higher, and a bit more irrational, as advertisers tried to determine their place in the new combined world.

Was I correct? To find out, I looked at a sample of client data across different verticals from October 1 through November 30 to identify some of the impact on various metrics since the transition.

Cost Per Click Rises

Cost per Click by Day

The biggest change that you can see spike over the first few days of the merger is CPC. As advertisers were getting prepared for the changeover, and the first few days following you can see costs spike prior to returning to the pre-merger figures.

Understanding the value of this new user base, as well as the impact to quality score was a total unknown for advertisers. It shows that advertisers were eager to learn, but also willing (or forced) to play the game for a few days to understand the impact to downstream metrics.

Click-Through Rate Drops

Click Through Rate by Day

A similar change occurred with click-through rate (CTR). It dropped dramatically across our accounts after the merger.

This wasn’t a surprise considering the keyword merging that was done, and advertisers potentially trying new match types that they didn’t have access to before if only running on Yahoo.

However, what is a bit more surprising is that it hasn’t returned to pre-merger figures like CPCs have.

Are advertisers less concerned about CTR, or increased prices due to the increased volume?

Our data shows that volume on MSN was up more than 300 percent pre- and post-merger. However, that doesn’t mean incremental volume for those who were running in both Yahoo and MSN during both phases — that volume was up only slightly.

Future Outlook

In aggregate, the impact to the net results aren’t yet net positive, with an exception being conversion rates. In fairness, however, conversions are up across the board for our advertisers due to seasonality in retail, and other economic factors we’re experiencing.

Percentage Changes

The key to managing your way through this merger is no different than standard optimization tactics. Understand your traffic and data, and make decisions that are best for your business. Leave no keyword or ad copy unturned in your testing.

However, be cautious because during the next few months. You will see a significant amount of testing as advertisers try to figure this out for their individual businesses.

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