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02/19/2009
A Pay per click form of advertising which offers full motion video and integrated images was recently launched by Yahoo.Since its advent, paid search advertising has only offered text links in advertisements. This announcement marks an important advancement in online advertising. Marketers will often devote a certain portion of their advertising budget to text only ppc advertisements and another portion to banner and box ads that show videos or images.
These new ads are called Rich Ads in Search and offer many of the same advantages as the traditional banner ads. Tim Mayer, vice-president of Yahoo’s Search Monetization and Distribution, states “It moves the advertising experience from just the blue links, to a more engaging experience for advertisers.”

Yahoo has had some stiff competition since Google arrived on the scene. In fact, the company’s market share in paid search has fallen from 13.8 percent in 2004 to 10.5 percent this year.

Yahoo has already begun testing this new form of advertising with the Pedigree dog food company. Any Yahoo search for ‘pedigree’ will bring up the light blue advertising box which showcases the video. The marketing director of Pedigree, John Anton, states: “Video is always more powerful than just words on the page.” He likes the fact that you have more options with video.

Besides the videos, sometimes just the new image ads are enough, e.g. the new Staples ad which can be seen whenever a search is performed for ‘staples.’ These image ads will often feature a light blue box with the company logo off to the side. Sometimes a search box is featured in which people can enter information such as their zip code, which will take them to a section of the advertiser’s web site that will list the nearest branches or offices.

Currently, Yahoo is charging a monthly fee for the service instead of the auction-based pricing more often utilized. While it may change in the future, for the time being this advertising method is only offered to the larger corporations by invitation, including SoBe, Home Depot, and Pepsi.

The results of this trial were quite convincing. Some of the companies involved experienced a 25 percent increase in click through rates. Not all companies had this high rate of results. Another advertiser had about a 5 to 10 percent increase in click through rates when compared with standard pay per click advertising.

Even so, this new form of advertising is sure to attract a lot of business. Because these larger companies often spend a lot of money to develop their logos and commercials, they are eager to showcase them in as many venues as possible. At the moment, Yahoo is the only company offering this new paid search advertising and Microsoft and Google have not announced any similar programs of their own.

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