Look at Google’s sponsored listings for some major American sports:
Compare this to Yahoo’s sponsored search listings for the same searches:
Quite the difference, huh? For the lazy – there’s barely any ads for these terms on Google, but there’s a ton on Yahoo. I don’t believe this is due to a discrepancy in the number of advertisers – after all, Google has more advertisers than Yahoo, and Google shows a full set of ads for slightly more specific queries like baseball gloves and basketball tickets. Are the users of Yahoo more prone to click and convert on these ads than the users of Google, and therefore advertisers are behaving rationally? I doubt it – terms like ‘baseball’ are relatively poor predictors of purchase intent (do you actually want gloves? tickets? cards? stats? news?) no matter what search engine you’re on. Are the advertisers on Yahoo less rational than advertisers on Google, and therefore more inclined to bid on low-performing terms? I doubt this, too – advertisers on Yahoo are almost assuredly advertising on Google too. Which leads me to believe that Google is preventing the ads from showing – probably due to their quality-based minimum bids.
This interests me, because I suspect there’s a lot more generic keywords out there than these four, and there’s a lot of ads that would run, but are getting switched off due to poor clickthroughs. But they undoubtedly would have gotten some clickthroughs, which means Google’s definitely leaving money on the table. This is the search equivalent of putting a price floor on your remnant – you keep the inventory from going for pocket change, but at the cost of your pocket change. Will Google be able to do this indefinitely in the name of a good user experience, even while its stock is getting hammered? Tricky problem – if you go after advertisers for revenue (*cough* automatic matching *cough*) you risk driving some off. But doing anything that inconveniences users might impact your overall market share.
{ 5 comments… read them below or add one }
I’m surprised you are just noticing this. It’s been like this for a while. Google also runs fewer ads on average for many queries, whereas Yahoo stays closer to the max that will fit.
I’ve found that Google runs ads on only about 50% of SERPs. I think the rate at Yahoo and MSFT is around 80%. (How do I know this? I actually ran a test about a year ago of about 10k random queries. I forget exactly why I did this, but there was a reason at the time.)
One corollary is that Google has a lot of headroom to increase monetization if they ever deign to. I.e. they could do a lot of things to get more revenue, but they believe that they are optimizing user experience – which is good for them in the long run.
Heh – I don’t think I’ve typed in a one-word generic query in ages, John, and that’s why I missed it.
Wait a second, if you were limited by your budget, wouldn’t you be less likely to bid on super-generic terms (baseball, hockey, etc) on Google than Yahoo or MSN?
It seems to me that the expense associated with bidding on those ultra-generic terms would kill a modest budget in a matter of hours or days, where concentrating on long-tail build out, intelligent bidding strategy and using different match types would allow advertisers to make the most of a smaller budget across a month. It’s probably a reason why those uber-generics aren’t showing many ads; advertisers simply can’t afford them.
Kerstin – why can advertisers afford them on other search engines?
Oh, I totally get that Google is as expensive as a… well, it’s pretty darned expensive. However, there exists the very real possibility that advertisers aren’t actually bidding on über-generics and it’s not Google’s minimum bid policy that’s causing the ads not to show. They’re ignoring generics in favor of more long tail keywords specific to their business. It’s economic reality, rather than a minimum bid issue.