Yahoo!-Bing play down cost inflation fears, but warn of ‘volatility’

Advertisers on Yahoo! and Bing can expect some “short-term volatility” but will not see significant inflation of costs due to the two search engines’ alliance.

The one-time rivals are coming together to pool resources in a 10 year deal, moving all advertisers onto the one campaign management platform, Microsoft’s  adCentre.

Speaking at a joint Yahoo! Efficient Frontier seminar in London Kevin Kyer, head of search marketing at Yahoo! played down concerns that the tie-up will inflate advertising costs.

However, he added: “There is definitely going to be some short-term volatility. Any time you bring together more players in one place you should expect some change.”

Kyer added that Europe would enjoy second mover advantage, the integration having already happened in the US and Canada.

Cedric Chambaz, Microsoft search and SMB marketing manager, said: “There are some changes to be expected. How much there will be has yet to be defined.
“It depends on how advertisers react to the auction and how consumers will start reacting to the organic and paid results.”

Referring to Google, Chambaz said the average CPC’s for Yahoo! and Bing were already lower than on rival sites and that even if there was some inflation it would remain competitive.

Yahoo! and Bing claim the combined audience, while some way off in volume terms on Google, is 33% more likely to convert and that when just travel is looked at it is 38% more likely to buy.

The sides are keen to stress that the agreement is a partnership and that they will continue to compete in terms of how search results are presented, display advertising and affiliate partnerships.

The two companies have already formed combined teams to run the search alliance and claimed the evolution of the Bing algorithm will benefit from the higher volumes.

Advertisers will also benefit from just having to use one platform to manage their campaigns. Kyer said: “We have not sold out to Microsoft, we have partnered with an incredible platform.”

Yahoo! will look to continue to develop its user experience, looking to enhance the richness of the search results, Kyer said.

Although the search engine’s “10 blue links” had proved popular and an efficient display format within the organic search results it would look to make enhancements.

“That’s the point of why we are getting together. We are creating efficiency but also it’s a promise of innovation, a promise of change.”

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