Yahoo! Search Marketing drops minimum spend level

Yahoo! Search Marketing in the US (previously Overture) announced in October that they are dropping the minimum $20 a month spend target on their pay-per-click accounts. But will Overture in the UK follow suit?

Overture introduced the minimum $20 or ’20 spend level in February 2004, which alienated a lot of small advertisers who were spending less than this in very focused markets or at low bid levels. This meant that any advertisers spending less than this level would be charged the difference to meet the new level and therefore this cost needed to be build into the campaign.

This was a short sighted move by Overture which prevented smaller clients testing the market and, of course, some small clients of today could become bigger advertisers of the future. However, due to ‘customer feedback’ the US version of Overture (now called Yahoo! Search Marketing) has announced that this minimum spend level will be scrapped. We believe that this is partly due to the impact of lost business since this change was introduced but also due to the imminent threat from MSN’s own pay-per-click tool.

MSN has been testing their new PPC service in France and Singapore over recent months and is now beta testing the tool within the US. We expect the service to go ‘live’ in the spring of 2006 and this will have a significant impact on Overture, which we estimate relies on at least 50% of its PPC traffic from MSN. They are clearly worried about how advertisers will split their budgets after this change and want to attract more advertisers now.

A representative of Overture in the UK said that there were ‘no plans’ to remove the minimum spend level here yet, but watch this space – it’s likely to follow suit soon.

If you currently use Overture, or have done in the past, and would like to discuss the impact of this change and the forthcoming launch of MSN’s own PPC tool, please get in touch.

Leave a Reply