ADOTAS – The big news from the latest Yahoo’s walk of shame — I mean, earnings report — was that display sales growth, typically a Yahoo! stronghold, had slipped from 10% to 5% between the first and second quarters. Much of this was due to display revenue taking a dive in the U.S. thanks to a sales team shakeup.
The less surprising news was that the search partnership with Microsoft’s Bing is still not paying massive dividends — while search revenue fell 19% during the first quarter from $440 million to $357 million, it was back up to $371 million in second quarter, still a decline of 5% year over year. Unimpressive revenue per search is seen at the heart of the matter — it seems Microsoft adCenter, which operates the paid search machinery, is having difficulty dealing with the amount of traffic.
On Thursday, the company announced it was introducing updates to its broad and phrase matching features.
“The goal of this enhancement is to deliver higher-performing and more relevant impressions and clicks to advertisers invested in those match types,” wrote Ricky Poole, Microsoft Advertising Community Specialist on the ad division’s blog. “We suggest that you monitor your budgets to ensure your account is prepared to take on additional traffic. You’ll also want to monitor bids to ensure you’re able to compete effectively for any additional clicks and impressions.”
But there’s more: David Pann, general manager for adCenter and search networks, tells MediaPost that Microsoft will be introducing a new user interface as well as reporting features between now and November. In addition, he promised targeting controls and core algorithms upgrades for improved matching.
The slow rollout means we’re unlikely to see a change in Yahoo’s third-quarter earnings (it would be difficult to tell any improvement in Microsoft’s earnings since its online division continues hemorrhaging cash), but do these seem like the right steps to improve Binghoo’s revenue per search?