Losing Hope With Yahoo, After Watching The Paid Search Division Stumble

Come and get us, Microsoft. That might as well be what Yahoo’s search ad division — Yahoo Search Marketing — is doing with its action of changing advertiser accounts without asking first.

Part of Yahoo’s long-standing problem has been that it generates less advertising revenue per ad than Google. The Panama upgrade that came out two years ago was supposed to fix that — and didn’t. Then the partnership with Google was supposed to fix things — and never happened. Moreover, that deal just highlighted problems with Yahoo’s broad matching system.

Rather than fixing those problem and earning more revenue by doing something advertisers actually want, Yahoo seems more interested in doing manual tweaks to advertiser accounts — without explicit permission — to generate more money. That’s ticked off some advertisers, and Yahoo is foolishly — in my view — is sticking to its guns that there’s no need for advertisers to worry their pretty little heads about the changes.

Such a harsh tone? Well, Yahoo deserves it. Last June, it changed its terms and conditions to effectively let it do whatever it wants to advertiser accounts. No one really noticed until a further terms update came out earlier this month, attracting a number of negative posts from what Yahoo called its “blogger friends,” as it set out to clarify this week all their “misconceptions.”

No need to worry, wrote Yahoo. Only a tiny number of accounts were “optimized” by their staff, 2% of them. And 80% of those changes were accepted by advertisers after the fact, so Yahoo figures the changes “have been helpful.” And you know, it’s only the small-and-midsize advertisers who are impacted — giving them “service” that only a large advertiser might normally get. And it’s not permanent. C’mon — we tell you that we’ve done this thing usually within 8 hours, and then you can get the changes removed (though no mention of getting a refund back on what Yahoo spent on your behalf). And don’t like the service we opted you in to? Just find the support option link up there in the corner, send a message, and we’ll permanently opt you out.

Here’s a thought. How about Yahoo gives all the money it has to advertisers. Then they can take 2% of that money and invest the money in ways they think would be more optimized for Yahoo. If Yahoo disagrees — no worries! The money can be returned within 8 to 24 hours, though if there are any losses, well, sorry about that. And if Yahoo doesn’t like this, well, they can track down the advertisers using their contact forms and ask pretty please if they can be excluded from the investment program they never asked for.

Advertisers are not idiots, nor are they children. And they got treated that way by Google for years, denied the ability to easily opt-out of programs like AdSense For Content, if they so wanted. You couldn’t do that, because Google was steadfast that offering such options would just be too confusing for those poor little advertisers to understand. Things have gotten better, so for Yahoo to start acting like the Google of old? It’s astounding.

Yahoo should have never given itself the right to make changes this way. They should have asked advertisers if they wanted this “service,” to be more transparent and honest with them. They certainly shouldn’t have reacted with a “we’ll do what we want, you all don’t know better” post as they did.

Melissa Mackey is one advertiser who certainly wasn’t sold on what Yahoo was pitching. From her YSM, You Are The Liar! post:

I manage hundreds of thousands in advertiser spend and have been doing SEM since 2002 (before Yahoo even HAD a PPC program – it was still Overture then). I do actively manage all of my clients accounts. Yet Yahoo felt the need to add a new campaign with ad copy that could have been written by one of my 11-year old twins (wait, I take it back- it wasn’t even that good). And they were bidding on keywords that aren’t even relevant to my client’s offering. It was as far from optimization as it could be.

Yahoo goes on to say that “Advertisers are notified of any changes within 24 hours (usually, fewer than eight hours).” Double bullcrap. I never received any notification that this had been done – I found it by accident when I logged in to “actively manage” my client’s account.

She then says further that she’s bailing from Yahoo. Meanwhile, wrote Discovery over at the Search Engine Watch Forums:

They created ads that suggested we provided certain services which we do not. This is illegal for us to advertise. If a State’s Attorney General saw some of these ads we would be in some serious trouble right now; with only Yahoo to blame.

How in the world could Yahoo justify such a move? I would love to have heard what was said in the meeting where this program was decided on!

Google handled this same issue the proper way. Advertisers can click on “optimization this campaign”, a bunch of suggestions appear for your account, you review and approve as you see fit.

And in comments on Yahoo’s own “trust us” blog post, “Jeff” commented:

I’ve pulled approx $600k in planned spend and closed my yahoo search account. The new terms are totally one sided and unacceptable. I was told by the director of US sales I was not large enough to justify negotiation of terms. Fine. Google gets my budget. This is just another Illustration of why Yahoo keeps failing.

I’ve also seen others say they were pulling their ad spend to put into Microsoft. It’s the last thing Yahoo needs, to have its advertising revenue go to its top competitor or to the company it still seems hoping to fend off.

Why do this? Well, I asked to speak to Yahoo more about the change and why it couldn’t be made opt-in. No one was available. Since my mind was apparently made up, I was told, no Yahoo execs thought it worthwhile to talk further about it.

Seriously? I mean, I don’t like the policy — but Yahoo really didn’t want to present its viewpoint or talk with me on questions I had about its broad match capabilities? Nope. That condescending blog post was good enough. I was emailed:

We feel that the blog post represents the program the best so feel free to refer to that in your follow up post. As for the question around broad matching, we make ongoing updates to our algorithms (most recently in December). That said, we have different rules especially around geo-targeting when compared to our competitors. Additionally, relevance rules are very important in guiding what ads we show to users to preserve their experience. Though we feel confident that our broad match technology works very well, there are cases where an advertiser should customize an ad with additional keywords in the copy and this is the proactive help that our optimization program offers advertisers.

What’s all this about broad matching? Well, go back to September, when I wrote Yahoo’s Poor Ad Targeting & Thoughts On Google-Yahoo. It went into detail about how Yahoo was all big on the Google deal making out as if they’d get more ads. Except as I demonstrated, they had most of those Google advertisers already. They simply weren’t showing their ads, because Yahoo’s broad match feature seemed deeply flawed.

This is important. Advertisers who use broad match are explicitly saying “Hey Yahoo, show our ads in a variety of places.” And Yahoo’s failing them. Not only that, by failing them, it fails to generate revenue that it so desperately wants.

I love the line that Yahoo has different geo-targeting rules for broad match than Google. Right. When it wanted a Google deal, it was happy to show how Google was geo-targeting ads in the same way it could do if broad match worked right. But now that Google’s back to being a competitor — and it needs an excuse for the broad match failure — suddenly it’s all a relevance thing.

Since Yahoo didn’t have time to talk about broad matching, I went back to play with it myself and see if things have changed. The difficulty in doing this is that as I don’t have on-going campaigns, I have to start from fresh, which could impact whether my ad might or might not show.

For fun, I fired up a campaign yesterday targeting the word “hamster.” Would my ad then show up for terms like:

  • hamsters
  • hamster cages
  • hamster cage
  • hamster food
  • dwarf hamster
  • hamster pet
  • hamster wheel
  • baby hamster

As it turned out, it only appeared for the plural form, hamsters. All those other variations — which it might have been relevant for — failed to show the ad. This was the case even in circumstances where there were few or no other ads, and where as far as I can tell, the maximum bid was well within what should have made it show.

Now to be fair, Google did exactly the same thing as Yahoo. In fact, I was pretty amazed at how both of them were seemingly leaving money on the table. Imagine me, brand new advertiser trying to give money to these services, and I can’t get my ad to appear probably because they’ve got some internal metrics deciding I’m not spending enough versus not getting anything at all? The best defense I can give is that my landing page had nothing to do with hamsters, so perhaps their systems were THAT wise.

Sidenote: it’s incredibly hard to give Yahoo money. My credit card had expired (not surprising, as the number changed after a fraud incident), but to give them a new card, I had to give them my old card number. Like I kept my old card just sitting around. What genius thought of this “security” enhancement — someone trying to actively prevent people from funding their Yahoo accounts?

Looking for more thoughts, I turned to the wisdom of Twitter, asking who was better at broad matching, Yahoo or Google? The count so far? I filtered out some responses from people who clearly hadn’t tried Yahoo or weren’t decisive either way. It came out 18-5 in favor of Google, as best I could tell. If I didn’t get a vote correct in one or two particular cases, the margin makes it clear that it wouldn’t make a difference.

I’m left with the impression that Yahoo’s got a technology problem that it still hasn’t solved. And it’s tough writing that when I could be mistaken. But then again, it’s not like anyone from Yahoo seemed to care about talking about that with me, which often indicates that a company DOES have an issue. Moreover, Yahoo has self-admitted it has a problem when talking about how much it was going to learn from the Google deal on how to improve things. And someone who does know Yahoo’s search marketing system intimately after I wrote my earlier piece also confirmed to me privately there’s a broad match mismatch that was well known. But rather than fix the technology, Yahoo’s messing around with small changes to advertiser accounts? That’s the wrong focus. That doesn’t seem to be in the same interest as its advertisers.

Ah, but what do those blogger loudmouths know? I’ll leave with long-time paid search marketing expert Andrew Goodman’s thoughts on that:

The commenters on there, like Mel66, Jonathan Hochman, Ian McAnerin, and others, sure don’t seem like cranks to me. And they seem none too reluctant to hop on to reiterate their disappointment with the way Yahoo has handled this particular issue. Forgive us, again, for not bleeding purple. We’re just advertisers looking for real (not fake) transparency.

Indeed, they are — and to be treated like adults. Yahoo can’t afford to alienate advertisers right now. Shift the “help” to an opt-in system. I’m sure there will be plenty of takers, and the PR nightmare will get defused.

Related Topics: Channel: SEM | Features: Analysis | Top News | Yahoo: Business Issues | Yahoo: Search Ads

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About The Author: is a Founding Editor of Search Engine Land. He’s a widely cited authority on search engines and search marketing issues who has covered the space since 1996. Danny also serves as Chief Content Officer for Third Door Media, which publishes Search Engine Land and produces the SMX: Search Marketing Expo conference series. He has a personal blog called Daggle (and keeps his disclosures page there). He can be found on Facebook, Google + and microblogs on Twitter as @dannysullivan.

Connect with the author via: Email | Twitter | Google+ | LinkedIn



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  • http://www.techurbia.com cweave

    Thanks for the update. We stopped using Yahoo! because PPC management became a huge time-sink. I’m glad we canceled our account some time ago, and avoided this mess. Spreading the word on TechUrbia as well: http://learnitfirst.com/go.aspx?id=yahoo

  • Asiane

    I’m in shock you waited this long to cancel Yahoo, we moved our budget into Google and expanded our MSN efforts after numerous attempts to get assistance at Yahoo to expand our reach and increase results. I manage just under a half a million in online ad buys and I was shocked at how Yahoo felt my account did not matter.

    My clients unfortunately, felt that Yahoo was a necessity, this prompted me to propose a solution that was beneficial to my clients and my sanity. I opted to invest a small portion of the Yahoo budget into external marketing efforts such as linking and PR. I created graphs that clearly laid out the goal to rank well on Yahoo for top keywords that would yield greater reward and put the rest of the budget into Google and MSN. We reached our goal way ahead of expectations with #1 and #2 rankings across Yahoo, and everyone was happy and I earned a huge end of year bonus to boot. Just a few months ago, these efforts began to pay off on Google rankings as well.

  • demib

    Could this be one of the reasons you can’t get Yahoo to talk?
    http://kara.allthingsd.com/20090125/carol-bartzs-first-week-at-yahoo-memo-to-the-troops/

    “… Bartz (pictured here) said, according to one report others have since confirmed to BoomTown, that she would “drop-kick to f***ing Mars” employees who leak to the press. “

  • http://searchengineland.com/ Danny Sullivan

    No, Mikkel — I think Yahoo figures if they just ignore the issue, it will blow over. I think they honestly believe it is just a few blogger loudmouths who are bothered, and that they can keep doing this despite limited criticism. Just like how they’ve kept on doing paid inclusion despite no one else doing it. And to be fair, it’s not like this post is just rolling in comments :)

    But then again, I think Yahoo will find acting in this manner actually will be noticed by a variety of advertisers who quietly pull their money and put it into other places. Time will tell.

  • http://www.seopros.org Webmaster T

    Danny, you made some good points about the Yahoo! attitude. I agree, bottom line is Panama made a bad situation worse and everything they do to “fix” it blows up in their face!

    Yahoo! absorbed Inktomi, AlltheWeb, AV and OV and basically killed the progress/innovation they all seemed to be making. You would think that much search “know how” would result in something better than what it did. Yahoos’ problems start at the top and the new person will just speed it up. AutoCad is a much better business and it has/had the respect of users who use it. Yahoo! on the other hand has a long history of paying too much and taking good ideas and running them into the ground! Not to mention how Yahoo! treats the advertisers who pay the freight!!!!

  • SEOIvan

    Hey Danny, great article as always.
    Here’s my take in few words. Remember the initial offer a year ago (or when was it)? Remember the OPPOSITION by the bloggers, Flickerers, Twitterers, journalists and everyone else. Message by the public was: go to hell Microsoft and leave Yahoo ALONE.

    Look back.

    Now, with yahoo in deep trouble, could this be used as a tactic to wield public support for the merger? Think about it. They are loosing more advertisers then they are making money with the program (or will lose soon). The whole move is dumber then jumping with a backpack full of bricks from the airplane.

    So anyway, here’s my shameless self promotion and a detailed blog on the whole notion. Let me know what you think here (my web girl doesn’t want to enable posts without registration saying we’ll get flooded by spam)

    http://www.searchengineoptimizationcompany.ca/seoblog/World%20Wide%20Web/search-engines/could-yahoo-optimization-program-be-used-by-microsoft-to-wield-public-support-for-the-acquisition/02022009

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