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Thursday, February 22, 2007

Yahoo! has Nasty Sausage Ingredients

I thought the Google AdWords distribution fraud was bad. It's much worse with Yahoo! Search Marketing. With the spotlight on Yahoo! and their upgraded PPC advertising platform (codename Panama), you'd think they'd want to impress advertisers with quality partners. Instead, they appear to be desperate to monetize search by partnering with low quality sites. It's really unbelievable when you see it. Here's a screenshot from our free tool for tracking Yahoo! Search Marketing clicks:

ysm hits

In keeping with the Sausage Manifesto, here's a breakdown of the "PPC sausage" ingredients from this chronological look at the above 18 clicks (to give you a little flavor) from Y!SM ads:

5/18 Yahoo! properties = 28%
8/18 parked domains = 44%
3/18 2nd tier search engines = 17%

Hmm, 44% of paid traffic purchased from Yahoo! Search Marketing came from parked domains and only 28% from actual Yahoo! properties?! That's certainly not a very appealing recipe. Okay, 18 hits isn't much data to go on, so I decided to do a quick case study. I dug through web server logs for 4 clients who spend quite a bit on PPC advertising with both Google AdWords and Yahoo! Search Marketing. For privacy reasons, I'm obviously not going to talk about specific keywords or give any details about particular clients. I grabbed February log data and gathered at least 200 sequential Y!SM PPC ad clicks and looked at what percentage of those clicks came from Yahoo! properties and how much came from parked domains. Here's the data:

Client A:
67% Yahoo! properties
9% parked domains

Client B:
60% Yahoo! properties
14% parked domains

Client C:
57% Yahoo! properties
31% parked domains

Client D:
41% Yahoo! properties
46% parked domains

I could not believe the data when I started digging. My clients all had Content Match turned off with the expectation they were paying for search engine advertising. As it turns out, they were actually buying traffic which was composed of anywhere from 9%-46% clicks from parked domains. That's some nasty sausage. Make sure you're tracking your Yahoo! Search Marketing PPC ad spend!

I'm contemplating dropping Yahoo! Search Marketing entirely and using SEO tactics for traffic for my clients. If it's possible to buy purely Yahoo! traffic, much like you can run a Google AdWords campaign opted into traffic only, I'll definitely stick with Y!SM. If not, I'll have to decide on a case-by-case basis if it's worth playing whack-a-mole to tweak a Y!SM ad campaign to minimize low quality traffic. I'll be curious to see the Yahoo! response (or lack of a response) to this comment I left on their blog:
Could you please let me know how to:
1) Block ad distribution to individual sites
2) Run ads only on
I'm really disappointed right now with both Yahoo! and Google. I wonder if any change will come about due to the Sausage Manifesto. We sure could do with some lean sausage.

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Blogger Ian F. said...

Wow. A very interesting post Rich. I'm about to start delving more into YSM myself so I shall be interested to find out what else you discover!


Fri Feb 23, 04:45:00 AM EST  
Blogger Richard said...

Thanks, Ian. I actually used Overture before I started using AdWords. It was quite nice when there were $0.05 bids and not many big advertisers. Google built a much better advertising platform. Now, since Yahoo! purchased Overture, they've upgraded to a new ad platform. However, they seem to have failed in their quest to build a better system than Google's. At least with Google you can choose to run ads solely on Google. Based on a response on the Y!SM blog, that sort of control doesn't appear to be an option with their "upgraded" system.

I'm tempted to drop Y! entirely. Be careful with your Y!SM ad spend. Watch out for the low quality traffic. Their use of parked domains appears to be more widespread than Google's.

Fri Feb 23, 07:44:00 PM EST  
Anonymous Mark from said...

This is very interesting - How can we compare it to AdWords though? Is there any information on what type of traffic they are really sending to us?

Tue Feb 27, 09:36:00 AM EST  
Blogger Richard said...

Mark, Google does also have a distribution fraud problem. However, it doesn't appear to be as reliant as Yahoo! on parked domain traffic. Plus, you have more control over your PPC ad spend. For instance, you can choose to only run search ads on Google. Read Update to Click Fraud Isolation Strategy for more details.

Tue Feb 27, 11:04:00 AM EST  
Anonymous Anonymous said...

It's absolutely stunning that Yahoo tries to get this over on advertisers and to a large extent they get away with it.

Yahoo is a Pirate!

Tue Mar 04, 09:35:00 PM EST  

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