To complement Stacey Morgan Smith’s post regarding the impact of the bing and Yahoo! union on organic search, I’m writing to you about its impact on Pay Per Click advertising. Here are some of the facts that we know so far:

• The deal is still a long way from closing, in fact the complete bing/Yahoo! search engine is at least two years away. The process of approval alone will likely take the rest of 2009.
• Microsoft’s adCenter platform will replace Yahoo!’s Panama platform. This means that ads placed in Yahoo! will be managed through MSN adCenter’s interface. This will take additional transition time after the deal is approved by regulators.
• Cost Per Click (CPC) prices will be set by adCenter’s automated auction process. With an increase in advertisers coming to bing from Yahoo!, it will be interesting to see what happens with CPCs. Like anything in the PPC medium, industry verticals will obviously play a large role.

One of the primary shortcomings of Microsoft’s adCenter was lack of volume. It simply does not generate as much traffic as Google or Yahoo! This is one of the most intriguing parts to this partnership. In the words of a press release from www.choicevalueinnovation.com:

“With the addition of Yahoo!’s search volume, Microsoft will achieve the size and scale required to unleash competition and innovation in the market, for consumers as well as advertisers.”

Overall, the general consensus among the PPC community is that this partnership is a good thing for the PPC industry. It will give Google increased competition and also will give Microsoft the search volume it needs to accelerate the learning from its own marketplace and improve its adCenter platform more quickly. I’m looking forward to any improvements Microsoft can make to its adCenter management interface. At the moment, AdWords provides the most advanced campaign management tools, so it will be interesting to see what improvements Microsoft can make with the increased search volume and insight from Yahoo!.

Sources: ad Age, Choice. Value. Innovation., and SEW

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