Microsoft – Yahoo Deal : Great for SEM Industry

by Matthew Diehl on July 29, 2009

With the new Microsoft – Yahoo search deal announced lets take a moment to think about the impact the joining of the #2 & #3 search platforms on the Internet will have on Search Engine Marketing spending.

In a recent post, “2009 SEM Spending Up While Executive Confidence Down“, I highlighted that SEM spending currently makes up 60% of Interactive Marketing budgets and will grow to $31.6 Billion annual spend by 2014. These stats were released before a “viable” competitor to Google was in the marketplace.

Yes, the Microsoft – Yahoo deal will create a true competitor to Google in the search and Pay-Per-Click (PPC) advertising markets. With Microsoft & Yahoo coming to accords with the search agreement they will now have a combined control of 25 – 30% of the search market.

Businesses are now shown a clear second option for their PPC budgets and this will have a dramatic impact on SEM spending. Divided it required twice the effort to achieve results in Bing & Yahoo but with a streamlined solution businesses will begin advertising on a new platform that reaches more viewers for less cost (no brainer, right?).

Some may shift funds away from Google PPC spend and apply that to their new Microsoft-Yahoo PPC budget. However, that is a small fraction of businesses who are displeased with their Google advertising. Most businesses will begin to add on to their budgets to accommodate a second advertising avenue that will allow them the reach up to 97% of search engine users through just 2 platforms.

By simplifying the search landscape, Microsoft and Yahoo have not only created a true competitor to Google search but have created an attractive opportunity for businesses to spend their online marketing budgets.

Overall, the deal is Great for SEM Industry.

Comments on this entry are closed.

Previous post:

Next post: