Yahoo Testing Rich Ads in Search

Yahoo Search Marketing recently announced that they are launching their Rich Ads in Search program with a few household names to test the integration of video and images into the Paid Search Results. They are calling this program Rich Ads in Search, and it allows an advertiser to place images, videos, and custom search boxes into the paid search ad.

Search Marketing’s blog

A limited group of advertisers tested it in the fourth quarter of 2008 and saw click-through rates rise by as much as 25 percent. They’ve also seen improved brand exposure and conversion rates. It remains to be seen how this can improve the results for small to mid-sized businesses, who don’t have the same kind of brand recognition as the trial companies, but the editor of Yahoo! Search Marketing’s blog, Jeff Sweat is very enthusiastic about the results.

With an increase of 25% in conversion rates, it’s going to be labeled as a success. I wouldn’t argue that the initial results are positive. I would be cautiously optimistic about the potential. Why am I not ranting about the potential to use video and images to improve Paid Search?

Three Reasons I’m Not Ecstatic About Rich Ads in Search:

Clicks to See the Model, not the Product – Remember the Paris Hilton commercial for Carl’s Jr? While that ad was definitely eye-catching and memorable, I never got the urge to go and buy a hamburger. It helped me remember the name Carl’s Jr. but didn’t result in a sale. While this may be part of the advertising strategy, and I agree it will definitely lead to a higher click-through rate, I don’t know that this is going to positively affect purchases, which is the ultimate goal. A portion of your PPC budget gets wasted anyway, due to click fraud and other errant clicks, and I am just concerned that images may cause people to click so they can see an image, not necessarily buy the associated product.

Helps the Big Guy, Hurts the Little Guy – I think that this will result in a higher cost per ad as more big-name retailers start to see Search Engine Marketing as a viable advertising model, and this is just the ammo that their ad agencies need to sell them on the idea. Ultimately I think this will work best for big brand names and companies that already have an existing brand following. I think the little shop with no corporate branding will be hurt, as they will lose the ability to compete in paid search with the large corporate budgets. Time to go back and work on that SEO strategy?

Paid Search is Inefficient- I am not a big fan of paid search in general, as I feel it serves the Search Engine well, and is a great revenue model, but it doesn’t have enough safeguards to adequately protect the advertiser. Launching these ads reinforces my general belief. Yahoo! knows that images generate more interest, and will get more click-throughs, great for Yahoo!, but maybe not so good for the advertiser. Since they can’t guarantee that there will be more sales as a result, the only guarantee is that they get more clicks on the ads, and they generate more sales. Therein lies the problem.

I think that this was bound to be the natural progression, and I welcome the changes. Videos and images have been showing up in the natural results for some time now, but this is the first use in Paid Search. It definitely adds an interactive element to the results and can provide a greater user experience in the end. Whether this turns out to be good or bad for Internet Marketing, one thing is true, the traditional TV ad model is eroding, and they are losing serious ground to new media on the Internet. I would be very worried if I was one of the big conglomerates that run the media stations.

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