The keyword report from the interface gives you the average CPC, not your max CPC, and the desktop tool doesn’t show you the Key Performance Indicators (KPIs) that you will want to see to base your decisions on, like average position and click-through rate.

A Solution:

I’ve always been a big fan of using excel to help make tasks as “automatic” as possible, so I wanted to share the following process for combining the interface report with the desktop tool to make your bid changes. There is a lot of information here, but I promise that if you go through it a few times it will shave time off of your bid adjustments, especially if you are still manually typing bids into the interface one by one.

The point of downloading both the report and the desktop tool is so we can do two things:

1. Pull the actual CPC into the report that shows us our KPIs.
2. Create a file with the updated bids that you can easily import into the desktop tool.

Formulas To Use:

First you will need to know a little about the following formulas in excel. I’ll explain how to use them later on:

Vlookup – This formula is used when you want to look up, and pull over information from another sheet. When creating a vlookup formula I use the following saying to help keep everything in order: I want to look up “X” in “this range”, and what I want to pull is in column number “Y”, and if it can’t find what I’m looking for, give me “FALSE”. Now, if you’ve never done this formula, I’m sure that saying doesn’t really make much sense, but it will be easier to understand when you put it into practice below.

Concatenate – This formula allows you to combine text and/or cells together. You will need to put a comma between each piece that you are concatenating, and remember to put quotes around spaces and text that you are adding. If you’d like some more information, you can review another post of mine about adding tracking parameters to URLs.

Setting Up Your Bid Change Workbook

The first thing you will need to do your bid changes is a keyword report from the Yahoo! interface, and a download of the keywords from the Yahoo! desktop tool.

To get the keyword report from the interface, follow these steps:

1. Log into your Yahoo! account, and go to the Reports tab.
2. Choose the Keyword Performance report from the left hand navigation.
3. Set your time frame for the report. We typically run our reports for 30-day time periods, but you can do more or less depending on the amount of volume your account gets.
4. Download the report to a .csv, and open the file. Save the workbook as an excel document, and give it an appropriate name.
5. The report heading information is not necessary, and all of those rows should be deleted so cell A1 contains the header “Keyword”.
6. The row immediately below the report headers can also be deleted, because we don’t need to know any of the totals.

Once you have cleaned everything up your sheet should look like this:

Looking at the interface report you will see that there is a column for cpc (in yellow above), but as I mentioned before, this is the AVERAGE cpc over the time period you are looking at, and NOT the actual cpc bid that you have set. Because this data isn’t what we want, you can delete all of the data in that column.

To get the keyword download from the desktop tool, follow these steps:

1. Open up the desktop tool, and make sure you have downloaded the most recent data of the account you want to look at. You do this by clicking on the “Get Account” button in the upper right hand corner, and entering your login information.
2. When the account download is finished, make sure you have the entire account highlighted in the left hand navigation, and click on the keyword tab so you are looking at every keyword in the account.
3. Export the entire account to excel.
   1. Go to “More Actions” in the upper right hand column, and choose “Export to Bulksheet (CSV).
   2. Click the account box so all of your campaigns are automatically selected, and hit “Export”
   3. Save the file, and open it.
   4. Copy the entire sheet, and paste it into a new tab in the report download file that you saved earlier.
   5. You won’t need the desktop export file anymore, so go ahead and close it.

Now that you’ve downloaded everything you will have an excel file with 2 sheets, one with the interface data, and one with the desktop tool data.

If you think about it, the probability of having duplicate keywords in your account is pretty high. For example, if you have restructured your account and moved “Keyword A” from “Ad Group 1” to Ad Group 2”, even though you’ve paused it in Ad Group 1 it will show up in the account download. When you download your account it would then look something like this:

If you were to do a vlookup in this example, the cpc bid for Keyword A would pull from the first time it shows up, which would in Ad Group 1 where it is paused. But we would want to know where it is Active in Ad Group 2. But never fear – it is possible to get around this by concatenating the Campaign, Ad Group, and Keyword, to create a unique “name” that we can vlookup against. That may sound more difficult than it is, so let’s walk through the few quick steps to set this up.

First, you will need to insert a column on the far left of the sheet, like so:

Then, starting in cell A2, you will need to create a concatenation formula that will combine your campaign, ad group, and keyword into one long phrase. You can copy and paste the following into your sheet:

=CONCATENATE(D2,C2,B2)

Drop it down for all of the other rows in your sheet. Just be sure to copy this formula into cell A2 when you start. Once you do that, your sheet will look like this:

Set up the second tab of your workbook the same way, but use this formula instead:

=CONCATENATE(B2,C2,G2)

Tip: Double check that your concatenation is pulling from the Campaign, Ad Group, then Keyword columns on both sheets, as you may have different report layouts set up. At this point I would also save the file if you haven’t done so already.

Combining the reports

A simple vlookup is all we need now to pull the actual CPC bid from the keyword download into the interface report. To do this, just copy and paste the following formula into the report in the CPC column:

=VLOOKUP(A2,’Desktop Tool Download’!A:J,10,FALSE)

Be sure to place this formula in the cell H2 when starting, and verify that it is pulling from the correct columns on your sheets. When you have made sure the formula is correct, pull it down to the rest of your rows so your sheet looks like this:

Tip: You’ll notice in the image above that I’ve also added a column header to the far right called “New Bid”. By doing this you can easily type in your new bids, or set up a calculation to increase or decrease your bids. This is also a good way to keep a record of the changes you make so you can revert back to the original bids should your changes cause a negative effect on the campaign.

I’m sure by now you’ve noticed those pesky bids called “Default”. When you see that it means that the keyword is using the ad group default bid, and you can pull that in by doing a vlookup against just the ad group name:

=VLOOKUP(C3,’Desktop Tool Download’!C:J,8,FALSE)

Tip: You will need to change the cell numbers to match your sheet. This is just an example to get you started.

Pulling It All Together

Once you have set your new bids, the final step is to put it back into the format of the desktop tool.

1. If you’ve been using formulas to get your new bids, copy and paste the values.
2. Go to the second sheet that contains your desktop tool download.
3. Highlight the header row, and turn on filters.
4. Set a custom filter to show you everything that does NOT contain “keyword” in the component type column. Delete all of the rows that are showing.
5. Take the filter off. You should now only see keywords.
6. Assuming you have not deleted any columns in either sheet, in the “Sponsored Search Bid (USD)” column enter the following vlookup formula to pull your new bid in:

=VLOOKUP(A2,’Interface KW Report’!A:Q,17,FALSE)

7. Copy and paste the values of the bids, and format them to be currency.
8. Delete Column A that contains your concatenated names.
9. Copy the entire sheet, and save it in a new file as a Unicode Text File. Once the file is saved, change the extension to .csv.

10. Upload the file into the desktop tool using “More Actions”.

If you’ve hung in there until the end, well done! Though this process has enough set up steps that is seems daunting when you are getting started, it really will help shave time off of your bulk bid adjustments in the end.

If you have any other suggestions on how to easily make bulk adjustments, please share them with us!

If you are like most pay-per-click managers, your YSM account is probably a cloned export of your Google AdWords account (excluding the content network campaigns of course). Assuming your AdWords account has a strong structure, duplication across search engines is still a good practice. However, with Yahoo’s new features, can take your campaigns to the next level. It is time to revisit your Yahoo campaign structure to get the most out of the network distribution features.

How the Search Partner Network Works
First things first, Yahoo! Search Partners and Content Match are two completely different animals and it is important that you don’t confuse the two. Yahoo’s content match displays ads based on specific web page content, geographic location and/or user profile. As cautioned in the past, the content match can spend a lot of money quickly. If you are running a lead-based campaign, watch your ROI very closely.

The Yahoo! Search Partners is a network of larger websites that have partnered with Yahoo, including Ebay.com, MSNBC, and USA Today.com. If you enable Search Partners with your pay-per-click account, then your ads will appear on these websites.

How to Structure Your Campaigns

1. Maintain Focused Campaigns/Ad Groups. Factors used to determine your account quality index in Yahoo have not changed.  It is still important to structure your campaigns and ad groups into highly focused content silos. This will enable you to write highly targeted ad text and drive traffic to highly relevant landing pages. In turn, your click-through rates will increase and your quality index will be stronger. If your Yahoo pay-per-click account is a mess, I strongly recommend a restructure before moving on to #2.
2. Separate Yahoo! Search and Search Partners. Yahoo now allows you to control your keyword bids on their search partner network. Performance varies greatly across Yahoo Search and Search Partners. By separating the distribution networks into different campaigns, you will have greater control over bids, allowing you to better maximize ROI.

   To target each network in a separate campaign, simply duplicate your campaigns in the Yahoo interface and set one to target Yahoo! Search and the other to Search Partners. Check out my post from last week to find Yahoo’s network distribution campaign settings.  To help with account management, I strongly recommending modifying the campaign names to include a network targeting qualifier (i.e. Example Campaign – Search and Example Campaign – Partners).

3. Duplicate Your Campaigns. Thankfully Yahoo now makes it easy for pay-per-click managers to separate Search and Search Partners. Using the “Import Campaigns” function, you can now easily import duplicate campaigns into Yahoo. Just follow these instructions.

Step 1: Export the campaign you choose to duplicate from the Yahoo campaigns tab. Save to your desktop.
Step 2: Go to the “Import” section within your Yahoo account
Step 3: Select your file to upload.
Step 4: From the Duplicate Campaigns dropdown menu, select Create a new campaign. This will create duplicate of the campaign, but it will change the name to Example Campaign (copy001). Since there is a current campaign running, the default will set the new campaign to pause.
Step 5: Change your network distribution settings for the existing and duplicated campaign.
Step 6: Add “Search” or “Partner” qualifiers to the campaign names.
Step 7: Activate the duplicated campaign.

How to Optimize Your Campaigns
Yahoo launched more advanced features to provide more transparency and better management of Search Partner network performance. Use the following features to optimize your newly structured search partner campaigns:

1. Distribution Quality Report – Use this report to determine your account performance within the entire network, search only, or search partners. This report is very useful in determining whither or not to continue running on the search partner network.
2. Ad Delivery Report – This report shows specific domains performance (including corresponding conversion metrics) for sites your ads run on within the Yahoo Search Partners. Use this report to identify sites that do not translate into conversions. Since new sites can appear every day, I recommend checking this report once a week to stay on top of high cost, low-converting sites.
3. Blocked Domains – This feature can by found within your account “Administration” tab. Add low-performing sites identified within the Ad Delivery Report to your campaign exclusions. Yahoo allows up to 500 blocked domains, so use ‘em if you got ‘em!

What is your experience with Yahoo’s network distribution features? Post your thoughts, learnings and/or experiences in the comments below.

Depending on your distribution settings, you now have different levels of control over keyword bids.  For the search network, you have control over individual keywords bids regardless of your targeting settings. If you have search and search partners running in the same campaign/ad group, search partner bids can be managed at the ad group or campaign level as a percentage of the search network keyword bid. For campaigns/ad groups that only target search partners, then bids can now be managed at the keyword level. It can be hard to keep your bidding opportunities straight, so below is a breakdown of the targeting options for each network:

Finding Your Network Settings

The search network settings can be set at either the campaign or ad group level. To setup your search settings, click on “Campaign Settings” and select either the campaign or ad group level.

Once you have chosen to target at the campaign or ad group level, select “Edit” under the “Network Distribution” section.

From here you can select to target the entire network, Yahoo! Search, or Yahoo! Partners. If you select to target the entire network, you can now adjust your Yahoo! Partners bid at the ad group/campaign level based on your minimum cost per click set within the search network.

Along with these distribution improvements, Yahoo also expanded its reporting functions to give advertisers a more transparent view of network performance. To learn more about the new reporting functions, check out Amber’s breakdown of the new Yahoo! Search Network reporting features.

Yahoo’s new distribution settings carry heavy implications on how to structure your search marketing campaign. Check back next week for new best practices to structure your Yahoo! account to maximize the benefits of the distribution settings.

There have been some new advances made in the Yahoo Network (finally!) that may help decrease spend on non-converting domains and increase conversions are high converting domains, as well as optimize your bids on the Yahoo network or partner networks.

1. Yahoo launches distribution quality report. This report can be found in the reports tab, at the bottom of the reports list.

The distribution report allows you to see all data (clicks, impressions, spend and conversions) broken out by Yahoo! O&O (yahoo owned and operated – all yahoo branded sites) and the partner network.

This report allows you to determine whether you can afford to advertise on Yahoos! Entire network or just yahoo search only or yahoo partners only depending on your traffic and conversion rates.

If you find that you no longer want to advertise on the Yahoo O&O or Yahoo search partners you can adjust your settings so you’re only advertising on one or the other, as well as adjust bids on one or the other.

To change your settings, click on a campaign, then click on campaign settings. Under the network distribution area on the right, click edit. This will allow you to choose which network you wish to advertise on. You can also adjust your bid plus or minus a percentage of your set maximum bid on the yahoo partner sites only at this time.

2. You can also run an ‘ad delivery report’ in the reports tab under Traffic Quality Reports.  This report shows you specific domains you’re ads are being served on via the Content Network or Yahoo’s search network. If you find there are several domains that are driving up your traffic and spend but not converting, you can easily block these domains.

To block certain domains, you can go to the admin tab, under the account general information there is an area for ‘blocked domains’ (right under blocked continents).  Here you have the option to submit up to 500 domains to be blocked from serving your ads.

If you find that you are exceeding the 500 limit of blocked domains, you can send your domains to your Yahoo rep and they can remove domains that they no longer advertise on any longer, so you can remove those domains and add in others.

My Yahoo rep says though a great way to prevent your ads from showing on certain unqualified sites is to keep track of your negative keyword lists. Negative keywords allow you to not show up for searches that contain that keyword. For example, if you’re offering bridal magazines, you may want to add in the keyword, ‘free’ assuming your magazines are not free. This will prevent your ad from showing if someone types in the keyword, ‘free bridal magazines’.

Another great addition to Yahoo is they have expanded their negative keyword limit from 250 to 500!  To add negative keywords you can add them in at the account level by going to the admin tab, then clicking on edit under tactic settings. Or you can add them in ad the ad group level by going to your ad group, click on ad group settings, and again click edit under tactic settings and add in your excluded keywords there.

There are a few more new Yahoo! features or enhancements that I’ll talk about later this week. Stay tuned!

Pricegrabber is a cost-per-click program just like Google, Yahoo and MSN. However instead of creating campaigns, ad groups, keywords and ads you simply upload a feed of all your ecommerce products with their relative information like price, description, shipping cost etc.

So now not only will you display your products on Pricegrabber, but they’ll display on Yahoo from the same feed.

I use shopping search engines like Pricegrabber, Shopzilla and Shopping.com for some of my ecommerce clients and love them.  As long as you have access to a database export of your products then it’s really easy to get an account and start advertising.  Online shoppers are known to comparison shop before making their final purchases, and that’s exactly what Pricegrabber does. You type in a keyword or phrase of the item you’re looking for, and Pricegrabber will supply you with several different companies that have identical items. If there are multiple companies with the exact same item, Pricegrabber will show you the prices and shipping cost for each company allowing you to pick the best deal.

If you haven’t thought of using shopping search engines before I highly recommend you give it a try, at least for a few months. You can set your bids typically as low or high as you wish, although some categories do have minimum bid requirements.

General Holiday Shopping Stats:

• Women this year are planning to spend less.
• More comparison shopping will be done this year over any other previous year to try and find the best deals and offers. This means it’s likely your click-through rates will decrease due to an increase in impressions from consumers clicking on various websites looking for deals. This also means more shopping will be done on comparison shopping engines like shopping.com, pricegrabber.com and shopzilla.com to name a few.
• More shoppers are buying practical gifts/necessities as Christmas gifts. This could mean gift cards to a grocery store over a whimsical Christmas sweater with Frosty the Snowman on it.
• Online shopping does still continue to grow year over year. So having an online presence is critical during the months of November and December.
• 26% of men will be shopping online, while only 20% of women will be shopping online. You know what this means, electronics! Men love to shop for electronics online and look for the best prices. If you sell ipods, TV’s, etc. make sure you have a promotion going on like Free Shipping or a discount offer for these male shoppers.
• 25 – 34 year olds will be shopping online mainly. Older people still aren’t 100% comfortable shopping online and will likely make the trip to the mall instead.

Statistics on Categories of Gifts:

• Clothing and accessories trump Black Friday sales.
• Books, DVD’s and games fall in second place.
• Then electronics and toys fall in third place.

Peak Days for Shoppers:

“Cyber Monday” (busiest online shopping day of the year) is most popular for people who have access to the internet at work and shop during their 8 – 5 office job.

Christmas Day is large in sales for shoppers (mainly women) looking for sales!

What are women looking for:

• Clothing and accessories
• Jewelry and watches

Other categories of items have peak shopping days too:

• Books/dvd/video games = sales peak cyber monday
• Home category = Black Friday sales begin to rise, real peak is second week of December.
• Toys = sales peak Cyber Monday, sales begin to declines after Christmas Day.
• Gift cards = Sales peak Cyber Monday.
• Game consoles = sales begin to increase Cyber Monday, but largest peak is on Christmas Day
• Consumer electronics = largest sales peak is during first week of December.
• Computer hardware = sales begin to pick up Black Friday, Cyber Monday is highest sales peak.
• Sporting goods = sales peak is day after Cyber Monday
• Travel = searches for travel rise towards the end of December, but really picks up after first of the year.

Takeaways:

• If you think you can still make good sales without the use of promotions and incentives, think again.
• 1 in 5 shoppers will only purchase a product online when free shipping is offered
• Most retailers offer free shipping both ways, free shipping over a certain amount or free shipping when…
• National free shipping day – December 17

Consumers are mainly finding their Christmas Gifts via:

1. search engines
2. amazon.com
3. catalog
4. ebay

Search Statistics:

• 50% of black Friday terms contained 4 or more keywords in 08.

• Black Friday conversions increased 147% compared to a normal day in November.

• Cyber Monday conversions increased 73%

• Lower CTR indicate more comparison shopping and more research

• Yahoo strongly recommends more ad text testing and the use of the content network during these peak sales times.

• Yahoo also recommends using campaign scheduling, advanced targeting geographically, or demographically, and help with optimization by an account manager.

Yahoo’s Buying cycle:

• Step 1:  Learning:  What do I want/need, how can I learn about xyz.
• Step 2:  Shopping: What brands, features are available.
• Step 3:  Purchase:  Who stocks this model number, “I want that one daddy”

More Yahoo Tips:

• Take users to landing pages!

• Ensure you site has effective on site search
• Confirm prices/promos throughout all your pages.

• Enter a daily spending limit – you can see how many impressions and clicks you may receive

• Make good use of dynamic keyword insertion to target your ads better.

• Ads with slogans or too much sales jargon don’t perform as well. Simply state what is being offered.

• Read user ratings!!! Put this in your ads and you may see increases in CTR’s.

• Maximize your ad space, use all characters.

• Be specific in your ad, not general.

• The yahoo marketplace is underserved by sites that actually sell items. Most are sites that aggregate other sites, like parked domains.

Overall I thought it was a great webinar and very insightful. It’s important to keep in mind these are just Yahoo! statistics for previous holiday seasons. If there is any time to increase your budget for PPC advertising it would be during the end of November and all of December. If you have a travel related website, increase your budget after Christmas and during the month of January. Good luck this holiday season!

Match types can be tricky, especially when it comes to adding negative match keywords. Negative match keywords (or keyword exclusions) are a very effective way to reduce the number of unqualified clicks on your ad. But negatives can get confusing, and often times a manager will inadvertently add a negative that prevents a targeted keyword from showing ads. To me, Google keyword match types and negative match is pretty straightforward. My confusion settles in when it comes to adding negative keywords in Yahoo.

Recently in one of my Yahoo accounts I launched a campaign with keywords targeting satellite tv terms. However, I did not want my ads show up for a broad search term like tv or satellite. Herein my question: If I add tv and satellite as negatives, will that prevent satellite tv from triggering my ad all together? Before I get to answering this question, here is a quick review of the Yahoo keyword match types. Remember that these are set at the account level within your Yahoo account.

• Standard Match: Search query trigger an ad for an exact match to a keyword. This includes singular or plural variations, and common misspellings.
• Advanced Match: Ads are triggered for a broad range of queries related to a keyword, title, description or web content. This is the default setting in Yahoo.

If you are using Standard Match in Yahoo, it is not necessary to use account exclusions. Your ads will only be served if someone enters the exact keyword you are targeting. Negative keywords (or exclusions) only apply at the account or ad group level when you have your account set to Advanced Match.

Yahoo’s negative keyword feature is not as clear-cut as Google’s negative match type system. You have to be careful of the keywords you add as negatives, because you may be preventing your ads from showing. Back to my example.

If a search query exactly matches to a keyword you are targeting, then your account-excluded keywords will not prevent your ad from showing. In my example, I am targeting satellite tv channels but have tv and satellite as a negatives. If the search query is an exact match to satellite tv channels, my ads will show.

However, a negative keyword can prevent your ads from showing when the search query just matches a keyword phrase. In the same example, I am targeting satellite tv channels and have tv and satellite as a negatives. But the search query is the phrase: best satellite tv channels. Unless I am targeting this exact phrase in my account, my keyword exclusions will prevent my ads from showing.

In this case it would be best to set negative keywords at the ad group level. The terms satellite and tv should only be added as negatives to the ad group that contains the broad satellite tv term. These negative terms are too limiting for longtail search queries like satellite tv channels and best satellite tv channels, so these ad groups do not need negative keywords.

You may have noticed the relatively new column within your Yahoo! account titled, “Targeting.” Within this column you can adjust your demographic and geographic targeting, as well as your ad scheduling preferences. Here is a quick screen shot:

Within this screen shot, the little clock emblem indicates where you can adjust your ad scheduling for each campaign.

To turn your ads completely on or off, you can adjust the times for which they show. Within the screen shot below, you can see that I have selected to run my ads from 5am-10pm on Monday through Friday, and we’re not showing ads at all on the weekends.

So, that strategy isn’t too complicated to implement. With this feature you also have the option of increasing your bids during certain times of the day. However, of course, leave it to Yahoo to only allow you the option to increase your bids, but you can’t decrease them during certain times of the day. But there is a work-around to this shortcoming.

I want to adjust my bid automatically within the screen shot below. You can see that I can either increase my bid by per a certain percentage, or I can increase it by an actual dollar. amount.

If you want to solely increase bids during certain times of the day, then you’re all set! However, if you want to have higher bids in the morning and lower bids in the evening, then you have a little bit more work ahead of you. One way to work around this limitation of only being able to increase bids is this:

1. Determine what your bids should be during your high-bid time of the day. Determine what your bids should be during your low-bid time of the day.
2. Within your campaign, set your keyword bids to the lowest price that you’d like them to be during the day.
3. Adjust your ad scheduling settings to increase your keywords to your highest bids during those high-traffic, great ROI times of the day.

With this method, you set your bids to the lowest point and then use ad scheduling to increase them automatically. This way, in a sense, you are increasing and lowering your bids to improve your performance.

Ad scheduling can be a great way to improve your PPC campaign’s performance by targeting the best time of day, while shifting focus away from those times of the day that don’t generate a great ROI. You just got to know how to work the system.

Microsoft-Yahoo partnership resources:

• You can learn more about the partnership at the  newly launched site: www.choicevalueinnovation.com
• You can follow the discussion on Twitter and keep up-to-date as news develops: Microsoft-Yahoo topic trend
• You can read a summary of the conference call held this morning: Search Engine Land summary
• Here is the official press release:

Microsoft, Yahoo! Change Search Landscape
Global Deal Creates Better Choice for Consumers and Advertisers

SUNNYVALE, CA and REDMOND, WA — 29 July, 2009 — Yahoo! and Microsoft announced an agreement that will improve the Web search experience for users and advertisers, and deliver sustained innovation to the industry. In simple terms, Microsoft will now power Yahoo! search while Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers.

For Web users and advertisers, this deal will accelerate the pace and breadth of innovation by combining both companies’ complementary strengths and search platforms into a market competitor with the scale to fuel sustained development in search and search advertising. Users will find what they care about faster and with more personal relevance. Microsoft’s competitive search platforms will lead to more value for advertisers, better results for web publishers, and increased innovation and efficiency across the Internet.

Under this agreement, Yahoo! will focus on its core business of providing consumers with great experiences with the world’s favorite online destinations and Web products.

“This agreement comes with boatloads of value for Yahoo!, our users, and the industry. And I believe it establishes the foundation for a new era of Internet innovation and development,” said Yahoo! CEO Carol Bartz. “Users will continue to experience search as a vital part of their Yahoo! experiences and will enjoy increased innovation thanks to the scale and resources this deal provides. Advertisers will also benefit from scale and enjoy greater ease of use and efficiencies working with a single platform and sales team for premium advertisers. Finally, this deal will help us increase our investments in priority areas in winning audience properties, display advertising capabilities, and mobile experiences.”

Providing a viable alternative to advertisers, this deal will combine Yahoo! and Microsoft search marketplaces so that advertisers no longer have to rely on one company that dominates more than 70 percent of all search. With the addition of Yahoo!’s search volume, Microsoft will achieve the size and scale required to unleash competition and innovation in the market, for consumers as well as advertisers.
Microsoft CEO Steve Ballmer said the agreement will provide Microsoft’s search engine, Bing, the scale necessary to more effectively compete, attracting more users and advertisers, which in turn will lead to more relevant ads and search results.

“Through this agreement with Yahoo!, we will create more innovation in search, better value for advertisers, and real consumer choice in a market currently dominated by a single company,” said Ballmer. “Success in search requires both innovation and scale. With our new Bing search platform, we’ve created breakthrough innovation and features. This agreement with Yahoo! will provide the scale we need to deliver even more rapid advances in relevancy and usefulness. Microsoft and Yahoo! know there’s so much more that search could be. This agreement gives us the scale and resources to create the future of search.”

“This deal fits the long-term strategic direction of Yahoo! to remain the world’s leading online media company and Carol Bartz has the full and unanimous support of the Yahoo! Board behind this deal,” said Roy Bostock, chairman, Yahoo! Inc. “This is a significant opportunity for us. Microsoft is an industry innovator in search, and it is a great opportunity for us to focus our investments in other areas critical to our future.”

The key terms of the agreement are as follows:

- The term of the agreement is 10 years;

- Microsoft will acquire an exclusive 10 year license to Yahoo!’s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing web search platforms;
Microsoft’s Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites. Yahoo! will continue to use its technology and data in other areas of its business such as enhancing display advertising technology.

- Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers. Self-serve advertising for both companies will be fulfilled by Microsoft’s AdCenter platform, and prices for all search ads will continue to be set by AdCenter’s automated auction process.

- Each company will maintain its own separate display advertising business and sales force.

- Yahoo! will innovate and “own” the user experience on Yahoo! properties, including the user experience for search, even though it will be powered by Microsoft technology.

- Microsoft will compensate Yahoo! through a revenue sharing agreement on traffic generated on Yahoo!’s network of both owned and operated (O&O) and affiliate sites.

- Microsoft will pay traffic acquisition costs (TAC) to Yahoo! at an initial rate of 88% of search revenue generated on Yahoo!’s O&O sites during the first 5 years of the agreement.

- Yahoo! will continue to syndicate its existing search affiliate partnerships.

- Microsoft will guarantee Yahoo!’s O&O revenue per search (RPS) in each country for the first 18 months following initial implementation in that country.

- At full implementation (expected to occur within 24 months following regulatory approval), Yahoo! estimates, based on current levels of revenue and current operating expenses, that this agreement will provide a benefit to annual GAAP operating income of approximately $500 million and capital expenditure savings of approximately $200 million. Yahoo! also estimates that this agreement will provide a benefit to annual operating cash flow of approximately $275 million.

The agreement protects consumer privacy by limiting the data shared between the companies to the minimum necessary to operate and improve the combined search platform, and restricts the use of search data shared between the companies. The agreement maintains the industry-leading privacy practices that each company follows today.

The agreement does not cover each company’s web properties and products, email, instant messaging, display advertising, or any other aspect of the companies’ businesses. In those areas, the companies will continue to compete vigorously.

The transaction will be subject to regulatory review. The agreement entered into today anticipates that the parties will enter into more detailed definitive agreements prior to closing. Microsoft and Yahoo! expect the agreement to be closely reviewed by the industry and government regulators, and welcome questions. The companies are hopeful that closing can occur in early 2010.

The companies have established a website at http://www.choicevalueinnovation.com to provide consumers, advertisers and publishers with additional information about the benefits of the agreement.

Conference Call – 5:30 a.m. PDT, Wednesday, July 29
Yahoo! and Microsoft will host a conference call with Yahoo! CEO Carol Bartz and Microsoft CEO Steve Ballmer to discuss the agreement at 5:30 a.m. Pacific/8:30 a.m. Eastern Time today.

To listen to the call, please dial 1-866-515-2908 in the U.S. and Canada; +1-617-399-5122 international, reservation number: 47968026. A live webcast of the call can be accessed through Yahoo!’s Investor Relations website at http://yhoo.client.shareholder.com/results.cfm.

The companies have also established a website at http://www.choicevalueinnovation.com to provide consumers, advertisers and publishers with additional information about the benefits of the agreement. In addition, an archive of the webcast will be available through the same link. An audio replay of the call will be available for two weeks following the conference call by calling 1-888-286-8010 in the U.S. and Canada; +1-617-801-6888 international, reservation number: 91217610.

Non-GAAP Financial Measures
This release refers to operating cash flow (operating income before depreciation, amortization of intangible assets, and stock-based compensation expense, or OCF), which is a non-GAAP financial measure. The most comparable GAAP measure is income from operations. The estimated annual OCF benefit of $275 million included in this press release is the estimated annual benefit in income from operations of $500 million less approximately $225 million of estimated annual savings in depreciation, amortization and stock-based compensation expense.

Breaking out your sponsored search tactic from the content network in two separate ad groups helps you manage your bids better since they’re more organized and it allows you to create different ad texts for two different audiences. Some say that people viewing ads on the content network respond better to promotional-salesy copy over people who perform an actual search.

Here’s how you do it:

1. Go into your Yahoo Search Marketing campaign, select an ad group that is running both sponsored search and content network together.

1. Then, towards the middle of the page there is a button that you can click that says, ‘split ad group’. Click it!

3.  A window will pop up asking you to confirm that you want to split your ad group into two separate ad groups. Click the button that says ‘split into separate ad groups’ if you still wish to continue.

4.  From there, you will be asked to name your two new ad groups. Click ‘save changes’.

5.  Once you’ve done these steps, Yahoo will automatically separate your sponsored search from the content network into two separate ad groups. This takes about 30 seconds to complete.

After the separation is complete, you will have two brand new ad groups containing the sponsored search and content network tactics. Your original ad group that you separated, will be paused.  Keep in mind that your Quality index will reset at this point for your original ad group. After speaking with my rep. about this, this is what he had to say:

The quality index score will reset. So there will be a period of learning. This may cause terms to have a slight increase in CPC before normalizing.

So just remember not to react too quickly to changes made by the split ad groups tool. Give it at least a week or longer depending on traffic volume to make an informed decision.

I really like that every once in a while Yahoo! will surprise me with a new feature that makes my life easier that Google AdWords doesn’t have. I think it’s a great feature and I wish Google AdWords had something identical. Not that it’s difficult to copy and paste some keywords and change some settings, but it’s nice Yahoo took that step out of it and does it for you automatically.