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Wednesday, March 3rd, 2004

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Highlights of the Week: Yahoo! Introduces Paid-Inclusion Program

The search engine marketplace has undergone significant changes over the past 18-months but yesterday's news from Yahoo! marks a turning point in the industry. Timed to coincide with the New York Search Engine Strategies conference, Yahoo announced a massive increase in paid inclusion fees and distribution of results. While Yahoo! and Overture issued press releases through their public relations firm, Fleishman-Hillard, their affiliates and resellers such as Position-Tech and Trellian issued press releases of their own, creating a confusing and at times messy mountain of uninformative information. Countless calls and articles later, we think we have deciphered meaning within the morass. The bottom line is, search engine advertising is about to become a lot more expensive. How these new expenses will impact the search engine marketplace in the long-run remains to be seen but the impact on websites with lower advertising budgets will be enormous.

Yahoo's distribution reach is massive. Since it began displaying results from its own search engine in place of Google results, Yahoo controls over 41% of search engine traffic either directly or through one of its six distinct search properties, Yahoo Search, Yahoo Directory, Overture, AlltheWeb, Inktomi and AltaVista. Inclusion at Yahoo is extremely important, and may become more important in the near future if AOL continues to consider Yahoo as an alternative listings provider to Google. Yahoo acquired its search engine empire over the past year through the acquisitions of Overture and Inktomi. While Yahoo's purchasing streak left it in the position of owning several powerful patents and some of the most innovative technologies, it was also left with six different (and sometimes competing) inclusion programs. It appears Yahoo is trying to consolidate these programs but the method they have chosen is eerily reminiscent of a fatally flawed fee structure LookSmart implemented in November 2002.

Yesterday's announcement centered around Yahoo's new Content Acquisition Program (CAP), which will be run by Yahoo's Overture division. CAP has two basic components, one for smaller websites, known as Site Match, and another, known as Site Match XChange for larger corporate sites. Inclusion in either component will be more expensive and will include a cost-per-click charge of $0.15 or $0.30, depending on the competitiveness of the sector the site is listed under.

Site Match
For small businesses, costs will rise considerably. Under the new fee structure, a smaller website will be required to pay the following fees:

  • $50 deposit (to cover cost-per-click charges)
  • $49 for review and indexing of the Index page from a URL
  • $29 for each of the next 2 - 10 pages
  • $10 for all subsequent pages from a unique domain

This means a minimum cost of $99 for a minimal submission with the addition of a cost-per-click charge of either $0.15 or $0.30, depending on the competitiveness of the category. The hidden fees attached to per-click charges could quickly run into the hundreds or even thousands of dollars per month if your website marketing team has done their jobs well. For example one of our clients is a small business who's site sees approximately 100 visitors per day, a reasonable figure for her sector. Accepting the 41% of web traffic figure, and assuming she was being charged the lower figure of $0.15 per click, her placement would cost her approximately $6.15 per day. Over the course of a 30-day month, that charge increases to $184.50. After 12-months, our client will pay approximately $2214.00 in click-through charges on top of the $49 submission fee and $50.00 deposit. That's a far cry from the $299 cost of being in the directory, the $39 cost of inclusion at Inktomi (placement at Yahoo until April 15), and the no-fee costs when Yahoo displayed results from Google. The only major benefit to the small advertiser is an increased frequency of visits from Yahoo's spiders which allows webmasters and SEOs to make minor tweaks and see results much faster.

Site XChange
For larger, corporate websites, the new fee structure is not as daunting or intimidating, and may provide benefits for the advertisers. Site XChange will accept all pages in a site from an XML feed detailing information about that site. Overture staff will manage these accounts and provide feedback to webmasters in order to help them improve the information they provide to help improve rankings under targeted keywords and phrases. Fees will be charged on a pay-per-click basis. Ask your webmaster or SEO for advice on establishing an XML feed, or follow this link for more information.

Costs Per Click
Washington DC based SEO Heidi Hendricks posted a breakdown of costs per category at the IHelpYouServicesForums today. She found the list at this Overture page.

Tier 1 Categories: $.15/click Tier 2 Categories: $.30/click
  • Adult
  • Automotive
  • Books
  • Computers & Software
  • Dating
  • Education & Career
  • Jewelry & Watches
  • Music & Video
  • Office
  • Other
  • Reference
  • Sports & Outdoors
  • Toys & Baby Equipment
  • Apparel
  • Electronics
  • Financial Services
  • Flowers, Gifts & Registry
  • Health, Beauty & Personal Care
  • Home & Garden
  • Professional Services
  • Real Estate
  • Telecom & Web Services
  • Travel

 

The Bottom Lines
The last time the search engine marketing world saw a fee-schedule like this one was in November 2002 when LookSmart introduced a cost-per-click charge on top of previously paid submission fees. Webmasters immediately rebelled against LookSmart and look what's happened since. That is where the comparison ends however as Yahoo is the second largest search tool in the world and placement at Yahoo is just about as essential as placement at Google. A webmaster rebellion is not likely to last very long or be successful. A better idea would be for everyone to tell Yahoo's customer service department what they think of this new pricing schedule by following this convenient link. We expect the team at Yahoo to make some changes to the fee structure of Site Match as it is obviously unfair to smaller players and will likely improve Overture's revenues at the cost of Yahoo's.

Adding a cost-per-click charge on top of a fee for inclusion might also drive smaller businesses over to Google which continues to provide the only 100% free listings available from the major search engines. This change also abruptly ends the honeymoon the "new" Yahoo has enjoyed with search engine marketers. SEOs and webmasters seemed unanimous in their praise for Yahoo's recent Google-free listings. With a massive increase in fees, many small businesses will no longer be able to afford to list in Yahoo. Several of our clients view search engine marketing as an equalizer against their larger corporate competition. This assumes all things are equal on the Internet, which is obviously untrue as all advertising budgets are not created equally.

On a darker note, Danny Sullivan has predicted that the days of free-listings are numbered, citing this move from Yahoo as his main example. With Google being the only major player not charging fees for inclusion, it is assumed that it is only a matter of time before they are forced into jumping on the fee-for-service bandwagon. Luckily, Google co-founder Larry Page criticized Yahoo's new policy yesterday saying he felt paid-inclusion has the ability to compromise the credibility of search.

For now, it appears the future is about to get a lot more expensive. Thank goodness it is at least interesting.

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Major Player Updates - The AskJeeves Exclusive


Did Yahoo!'s Rising Storm Finalize a Shift in AskJeeves Colors?

It appears that Yahoo!'s bold and less than brilliant foray into " Looksmart-like " paid inclusion may have been the final nudge that AskJeeves needed to shut down their paid inclusion program, Index Express (not Index Connect which is Inktomi). This significant shift of AskJeeves away from their 18 month-old paid inclusion program appears to be a timely distancing from the pending storm coming to Yahoo! after it announced its new Site Match system.

Why did AskJeeves shut down their Index Express service?  To get to the bottom of that I spoke today with Jim Lanzone, VP of product management at AskJeeves. First I should mention that he very carefully noted he does not believe there is a 'dark underbelly' to monetary search engine inclusion models. He noted Yahoo!, Looksmart, and many others when he emphasized that. When we concentrated on the topic of the cancelled Index Express service he explained that AskJeeves came to this decision based on two elements; the first was technical and attributed to significant testing of their paid inclusion model, the second was entirely monetary. The testing revealed that the differences between a page submitted via a trusted feed (xml feeds via Index Express customers) and a page indexed by the Ask spider were so significant that attributing proper relevance was very difficult. As a result, users, advertisers and Ask technicians alike were finding Index Express submitted pages ranking in odd places; sometimes ranking inordinately high or low. The second reason focuses on what is likely the shareholder's bottom line; the model was "not a very good monetization vehicle."

Will the AskJeeves database take a big hit with this change? This is difficult to say but considering that Jim Lanzone said 30,000 of the 2 Billion pages indexed in Ask were Index Express pages there could be a miniscule drop in Ask's database size. Other than that I cannot foresee any significant negative impact. In fact, I only see a brilliant move here since paid inclusion models will undeniably be under the FTC and SEO microscope for the next few months, what with Yahoo!'s 6 web properties adapting to it with gusto.

Note: It is important that our readers understand that the paid submission process at Ask Jeeves is still active and recommended by the staff at StepForth. According to Jim Lanzone, the sites that are submitted via Site Submit will be indexed within one week and then repeatedly 2 times per week. Considering that sites which do not pay submit may not be found or may only be indexed sporadically, this appears to be a very worthwhile service.

The other half of this article and interview continues here: "An Inside Glimpse of AskJeeves"

Pay-Per-Click Tip: Overture vs. Yahoo for Small Business Budgets

With all these changes surrounding Yahoo and the new Overture Site Match system, where do you stand to get the best bang for you buck as a small business?

First a quick glance at the new Site Match system. It is based on a combination of cost-per-click and paid inclusion. For $49 you can submit the first page to Site Match, for subsequent pages the cost is reduced. This will include your site within a network of engines such as Yahoo, AltaVista, AlltheWeb, Overture, all engines in the FAST network and others. But there is a catch. You will also be charged a $50 minimum deposit to go towards the new 15 to 30 cents per click charges that your listing will accumulate, and you are limited to having only the submitted pages indexed. So basically just to have your site included in the index you are looking at 49 dollars a year plus 15 to 30 cents per click, and are not guaranteed any placements what so ever.

For big companies with high advertising budgets, this may not seem so bad. But what about the little ma and pa shops? With Overture Content Match you can get nearly the same distribution, for less money and rank number one! Well, this isn’t entirely true, but for many smaller online companies who are positioned in a less competitive market this is an angle to look at.

If you are bidding on a keyword phrase that has little competition, there is a good chance that you can pay less per click for your traffic and avoid the $49 annual fee. If ‘blue widget’ is going for 12 cents a click for number one in Overture, you can have your site listed across the network for 3 cents less per click than with Site Match.


Hey Yahoo!
Just a thought, in my mind this would make more sense. Instead of charging 15 cents per click, why not make it 1 cent below the least expensive paid placement to a maximum of 15-30 cents. This would force the sponsored listings to always pay more per click?

 

Ask Yourself A Question...
In the Client Spotlight this Week: Parris Concierge

We've featured Katherine Parris' Toronto based concierge service in a past issue but today we're using her as an example of rapid-response analytics. Katherine runs a full-service concierge service in Canada's largest city. Catering to just about any planning, personal or corporate need under the sun, Katherine's business covers every base. She is one of the better known wedding planners in the Toronto region, organizes fantastic kids parties, and can make corporate events headache free.

Toronto had a very challenging year in 2003. From SARS to the US war in Iraq to the 15% increase in the value of the Canadian dollar, tourism and party planning showed sharp declines in 2003. In order to push business back to her office, Katherine undertook several steps involving her website and marketing campaign. While she already enjoys Top10 placement under any Toronto related phrase associated with her business, she was not getting enough phone calls. Readjusting her pay-per-click advertisements at Overture and Google AdWords made a limited difference but the volume of calls was still far below her expectations. Currently ParrisConcierge.Com is sitting in the Top10 in most traditional listings and has excellent pay-per-click campaigns underway. Her search engine promotion is working and her ranking numbers are excellent. After analyzing her stats and figuring out how users act when visiting her site, the conclusion drawn was that the site required a full redesign. That bring us to the reason for the write-up. Parris Concierge has a new site that goes live to the net this evening. If you're looking for concierge services in Toronto, give Katherine Parris and her experienced team a call.

Weekly Quick Tip: Write it well and they will come...

You know your business better than those who visit your site. You know your industry better than those looking for your site. One of the best ways to let people know this is through the publication of articles.

Articles are a wonderful marketing tool for two reasons:

1) By publishing articles you will be establishing yourself as an authority on the topic provided that the content is up-to-date and original. Make sure you have your articles proof read, not only for grammar and spelling but also to insure that people who are not experts on the topic can easily understand them.
2) By having your articles published on other sites you will not only benefit from the exposure on these sites but they will also be providing a link to your website. This link will be from a page entirely relevant to your site and thus, the link will be a valuable one. This will help improve your search engine rankings as well.

Tips

  • The articles you write should be between 800 and 1,200 words in length. If you are writing a longer one than that, it is best to split it into multiple parts (preferably limited to two).
  • To find places to publish your articles type in the keyword phrase you are targeting and add the word “articles”. Run this search on Google, Yahoo, MSN, and any other search engines you feel worth the time and visit the top sites on each engine. While some sites will only publish their own articles you’ll probably find that most of them will publish those from outside as well.
  • Sign up for Yahoo Groups and publish your articles there. Yahoo Groups will post these articles for other webmasters to take and put on their sites. You can require that a bio and/or link to your site are required.
  • Always check for people using your articles without permission! It is a wise practice to run a search for a couple phrases from your articles every couple of weeks. Use quotations before and after the phrase and make sure it is a line that is unique to your article. This will allow you to discover how many sites are using your articles and also allow you to double check and make sure that everyone is putting the link to your site on that page.

All that’s left to do now is watch your traffic rise, monitor your statistics and rankings, and get working on your next article. An important factor to consider in working on subsequent articles is insuring that you never run out of things to say. An article every couple weeks should be enough to keep your name out there. More than that and you may run out of topics to cover. That said, you know your business better than I do. If you can put an article out every day without running out of content topics, have the time to do so, and will be able to accommodate the increase in business then it’s certainly a worthwhile endeavor.

The Net Reality: Google Brain Implants?

Rumour has it that Google co-founder Larry Page is a technophile who is addicted to gadgets, widgets and really cool techno-doodads, a trait he shares with many of us here at StepForth, with the exception of me. I don't even know how to use a cell-phone. More often than not, I feel left out of technophile conversations simply because I don't care to carry technology that follows me away from the Internet. At times like that, I feel sad, lonely and out-of-the-loop <sigh>.

Today however, I feel great. WHY? Because Page is talking about brain implants being developed at Google for the hyper sensitive searcher who doesn't have time to sit down and type a search string into a text box. Page theorizes that in a few years, Google users will be able to get a sub-derm implanted in their brains that, through the use of WIFI hotspots, is in constant communication with the Googleplex. While this may seem to be on the same sci-fi level as the flying car and personal jet rocket propulsion packs, (even I would go for them), the concept is not too far flung from reality. British military researchers announced a breakthrough in brain-to-computer transmission a few years ago and access ability tools for the disabled are becoming far more powerful. Page is also privy to technologies most of us won't see for several years to come.

Anyway, it's been a long day and a good edition of the weekly news. I am still stuck to my keyboard but today and in the future, you know we'll be thinking of you.



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