Recently Yahoo and Google announced a new partnership. Here’s the skinny. Yahoo will serve up Google’s ads on about 80% of their search volume. This move will add about a billion dollars annually to Yahoo in the short term, but in the long term they are going to effectively kill off their search business. This deal really concerns me for several reasons:

1. Google is becoming a monopoly. Google already has about 65% of the search engine volume. A combination with Yahoo will give them over 90% of the search volume. I’m always a fan of competition over monopolies. This will effectively consolidate Google’s power and dominance. I’ve already mentioned how Google is raking the little guy over the coals. This will only make it worse.
2. Your costs on Yahoo are going to increase. Guaranteed. Average prices on Yahoo are about a third of what Google’s paid search algorithm is able to achieve. This is where all Yahoo’s new-found cash will be coming from. Straight from your pocket.
3. There will be less innovation. Yahoo is not known for their innovation in search. But Microsoft is actually innovating. Take their adlab or their excel plug-in for examples of the next generation of tools for advertisers. I believe that a combination with Microsoft would have combined Yahoo’s volume with Microsoft’s innovation. But with this deal there will be no reason to even run a separate Yahoo account. This means no improvements or innovations on their own platform. (Not that they understand how to improve their platform anyway)

Let’s hope that the Department of Justice puts this one to bed before they can execute it or that Microsoft and Carl Icahn go hostile. This deal completely seals Google’s dominance and your dependence on their traffic. Anyone interested in forming a consortium of concerned advertisers?

Running a search campaign requires that you collect and analyze a bunch of data. Of all the metrics you are collecting what is most important question that you should be asking? Some might say what is my conversion? Others might state cost per click. But chances are you aren’t collecting the most important thing.

What should you be asking: Why are my potential customers here? This is by far the most important and overlooked aspect of a campaign. Let’s say for example that you are a jeweler and advertising on terms related to “ruby.” Now, from your perspective that makes perfect sense. You sell rubies so you should naturally be advertising on them right? Not always.

What you should be asking yourself is what do people typing in this term really want? In the case of “ruby” most of that traffic is actually looking for information on the Ruby on Rails programming language and framework. So you might be paying for quite a lot of traffic that completely misses the mark.

When you are researching your market you want to break up all your keywords into really tight groupings. Each of these is a segment. Now ask each of these segments. So in our jewelry example we might have a tight group around “ruby” terms. When you drive traffic from this segment you’ll want to ask them “What were you looking for today? What is your most important question?”

When you start collecting this data the psychology of each and every single terms starts to unfold. By analyzing their answers you’ll realize that a majority of the traffic search on “Ruby” wants computer stuff and not gems. On the other hand you might find that “Rubies” is the where your audience truly lies.

But wait, it gets better. when you collect this data you can immediately integrate it into your search campaigns. When you analyze the data you can prioritize a list of concerns that people in a particular segment have. You can use this information in your landing pages and absolutely trounce conversion. When you speak to your audience in the same language and hit on all their major concerns you are much more likely to close the sale.

Go out and start digging into the psychology of your market. I bet you’ll find a huge pot of gold.

Don’t get me wrong, I love Google. I remember quite clearly what it was like surfing the net in the 90s. Finding what you were looking for was often really hard. Google was absolutely the key to unlocking information quickly and we loved it. Years ago, when I started advertising with them, I loved them even more. While Google gets their money from advertisers, it has always been on the side of the search user. Fanatically so. Over the past few years they have made countless changes to the rules advertisers must follow to be qualified the give them money.

They were the first to use your click through rate when deciding on your bid pricing. They were the first to consider the relevancy of the landing page. They punished campaigns with single page landers. They’ve changed a lot, but now, they have set the bar too high for most advertisers. Recently they stated that they will be considering landing load times when determining your quality score. Ok, I get it, another update. But when is enough, enough? What’s awful about all these updates is that somewhere along the way Google lost site of the small guy. Just about every day I hear from people with horror stories:

“I tried advertising on Google, but they wanted $10 a click. There is no way I can afford that.”

Its not that Google really is charging $10 per click. They are just telling you that “something” is wrong in your campaign or your web site. The tables are getting tilted again. The big sites with the big budgets and the big servers are less affected by all these changes than the huge base of small advertisers. And that is a shame. You shouldn’t have to be a technology and advertising guru to send a little traffic to your web site.

This is the tragedy of Google’s success. In fearlessly championing the search user, they are now pushing out many of the very businesses that helps catapult them to their huge success. One thing is for sure, it’s not getting any easier for the little guy.

What do you think? Have you been cut down by the big G?