The big search engines like Yahoo!, Google and Microsoft, all have syndication partners when it comes to placing ads. These syndication partners increase the reach of the ad, as now your ad not only shows next to the search results of the particular engine but also on third party sites. So far no problems, but read further.
Observing the Efficient frontier study that come out some time ago already, one can see Yahoo! derives as much as 55% procent from it’s advertising revenues from third parties (syndication partners). This means, obviously, only 45% is generated by the search engine itself. How does that influence your ppc campaign?
It looks like it would have a rather bad influence on your campaign. Syndication partners don’t necessarily have to be poor quality sites, but in Yahoo’s case the total of 1196 partner sites surely are not all top sites. Actually, thanks to a brave researcher, we do have a glimpse of the Yahoo syndication partners: a long list of local American newspapers, as well as this one to illustrate poor syndication efforts.
As a result you might experience higher conversion costs and lower conversion rates for your Yahoo campaigns. The syndication partners generally increase the clicks on your ad, but due to the low quality of syndication sites these clicks hardly convert. Furthermore Yahoo does not disclose the list of syndication partners nor does it provide the option to completely abstain from distribution among third parties (you can only opt out of 250 domains).
This lack of transparency in Yahoo’s search advertising is bothering many online marketers these days. The question remains how Yahoo’s advertising performance would look like of all syndication partners were excluded and the company should take quick measures to overcome these hurdles. As for now, you can take this information in account when planning on your next Yahoo ppc campaign.