How Google, MSN and Yahoo Differ on Search Engine Marketing

So you are interested in advertising on Google, MSN and/or Yahoo but don't know if there are any real differences. Take it from me, there are very big differences and being aware of them can save you a lot of money.

Back-story

Recently, I was charged with the task of promoting a new piece of software that is geared towards the small business market. I felt this was a good opportunity to run a test to see which search engine is most effective to advertise on. What I found was some startling differences between Google Adwords, Yahoo Sponsored Search and MSN AdCenter and how effective each one was at promoting my product.

Test Setup

Over two months run the same advertisements with the same keywords on Google Adwords, Yahoo Sponsored Search and MSN AdCenter to see how each of them performs. Though the daily budgets were the same, the cost per click had to vary in order to keep consistent with other bids for each search engine. The goal was to bid just enough to appear in an average search position of 2-3.

Test in progress

While the test was taking place I noticed that Google had by far the most impressions to offer and had very little trouble filling my entire budget each day. Yahoo, though they said they didn't have many impressions to offer for those keywords also maxed out my budget each day, sometimes even exceeding my daily maximum. MSN on the other hand never came close to filling my budget; sometimes it only drove a handful of people to the site over a week's time.

Another thing I noticed is that the cost per click varied slightly for the same position in their results. Google was the most expensive at just over $3 dollars per click, Yahoo was $2.67 and MSN was $2.39. I realize that the costs are a bit arbitrary without the keywords but this article is for comparison's sake and not specifics.

The Conclusion

In the end the only thing that really matters is how many clicks were converted. For those of you new to the term "conversion": A conversion is any signup, purchase or traceable action that you wish a user to perform. For us, a conversion meant a sign up.

After two months we had 60% of our signups from Google, 50% from MSN and a dismal 10% from Yahoo. The biggest surprise is that Google cost 50% of our total money spent, Yahoo cost 35% and MSN cost only 15% of our total budget. In the end MSN ended up being much cheaper per conversion and even though they didn't send a ton of traffic to our site it seemed that they were well qualified people that they were sending.

Yahoo was the biggest disappointment, costing over 3x's per conversion than Google and over 6x's more than MSN. There can be a host of reasons this is so, one of the possibilities is that Yahoo's users are not interested in the type of software we were promoting. Another possibility is that Yahoo's ads get clicked on by their users at a much higher rate which also causes the quality of the leads to be lower.

In the end, running campaigns on the major three search engines can be a great help, but monitoring them can save you a lot of money in the long run. What works on one search engine many not work on another, and keeping an eye on it will help you determine this. Don't be afraid to pull the plug if one is not working, sometimes you just need to go with what works and not force something that isn't showing you results.