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Sunday, July 03, 2005

Yahoo Paid Inclusion: Is this Story Authentic?

One reason many in the SEM business have been skeptics when it comes to paid inclusion is that it was that the claims made for it lacked credibility. Has anything changed?

I just saw the Yahoo Search Marketing (formerly Overture) newsletter, and the lead article talks about your "click shortfall." They ask: "Not getting the traffic you're expecting from standard web listings?" And then proceed to sell you Yahoo Paid inclusion, as if that will be the answer to getting more organic traffic. I would say "more organic free traffic," but of course, if it's paid, it isn't free. So scratch that benefit.

Yahoo lists features and benefits of the offering. Allow me to provide a reality check as well. As usual this is not me talking but the collective voices of generations of hardened SEM professionals and sceptical search engine lovers everywhere.

Benefit: "Fast and easy submission into the database that powers search results for popular search sites such as Yahoo!, AltaVista, AlltheWeb and others."

Reality: Yahoo also owns AltaVista and AlltheWeb and "others." [But no one searches on them.] And if you have to submit to it to be found, it isn't a quality search engine. They should discover you. In fact, Yahoo regularly states that its goal is to discover as much valuable web content as possible for inclusion in the index, submission or no submission.

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Benefit: Regular refreshes ensure that advertisers' most current pages are reflected in the database.

Reality: Any search engine that fails to keep its index fresh will lose market share. But should index freshness initiatives be funded out of your pocket?

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Benefit: "Quality review of submitted URLs ensures quality search experience for users and more targeted customer sales leads."

Reality: Ambiguity in policy created by potential ranking boost for paid submissions could land Yahoo in hot water with FTC.

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Benefit: CPC model provides high ROI.

Reality: Not as high as it would if the traffic were free. Yahoo's CPC pricing is arbitrarily set, meaning some companies will do wonderfully, and others poorly.

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Benefit: Larger companies spending $5,000 or more per month on paid inclusion get their own account manager.

Reality: We've already suggested that paid inclusion likely provides a ranking boost to participants as compared with non-participants, all else being equal. Now, preferred status with an account manager likely provides a further ranking boost and special advice on how to crowd out competitors, all else being equal, meaning that paying a little helps a little, and paying a lot helps more than a little. This doesn't sound like it dovetails very well with the purpose of organic rankings, especially given Yahoo's weak disclosure of the paid nature of results. On the other hand, if paying for inclusion doesn't improve rankings, then what was the point of it from the marketer's standpoint?

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There must be something good to say about paid inclusion, though, one hopes? Yes, to a degree, it actually seems to improve search quality, as Inktomi found when they went to the model in a move that basically admitted they couldn't weed out spam without this paid filter. As long as the commitment is strong to boost public-interest content such as relevant government pages or public radio transcripts on a query like "colorado housing," search quality isn't harmed by paid inclusion. In fact, paid inclusion helps Yahoo to pay for the cost of reviewing commercial sites and public-interest sites alike, keeping the really junky material out of the user's face most of the time.

At the end of the day, then, the user experience might be boosted by the adoption of a paid inclusion scheme. The only problem is, as a marketer, you probably won't get much out of it unless you're one of the big guys who can pull a few strings. What you're basically doing is helping Yahoo fund the human review effort that will lead to increased search quality, which means Yahoo's reported profit margins go up and their stock value stays high. Sound familiar? And doesn't that make you feel all warm and fuzzy inside?

Posted by Andrew Goodman




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