Forecast: Bing-Yahoo integration to prompt sharp CPC increases

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St. Louis—The Bing-Yahoo search alliance, being phased in this summer and fall, could result in sharp increases in advertisers’ costs-per-click, according to an analysis by WPP’s search marketing division, GroupM Search.

As Bing takes over the search functions of Yahoo, GroupM projects a short “period of volatility” during which advertisers can expect an average increase of 64% over current Bing CPCs for unbranded keywords, and a 78% increase for branded keyword pricing. The spike will be spurred by increased bidding competition from Yahoo-only advertisers moving to Microsoft Corp.’s adCenter paid-search unit, according to GroupM.

Once the marketplace settles, CPCs on Bing will reset 13% higher for unbranded keywords, and 23% above current branded keyword costs, GroupM said.

For its analysis, GroupM examined paid search campaign trends experienced by 12 of its clients with a steady presence on both Yahoo and Microsoft’s search networks dating back to 2007.

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