AOL’s Exodus From Google Search Partners Signals Major Industry Changes Coming

Just when you thought Microsoft was down and out due to the Yahoo contract renegotiation, they pick themselves off the canvas and score a huge knockout win with its announcement of a 10-year partnership with AOL. Under the new partnership, AOL will drop Google’s paid search listings in favor of Bing’s paid search listings while AOL will enlist its sales force and ad serving technologies to support Microsoft’s display advertising on its MSN portal properties.

aol-logoFor those that work with both of the companies as we do, this is a match made in heaven given both companies’ willingness to focus on ROI attainment for its advertising clientele. Not to mention it creates a much bigger competitive rival to Google both in paid search and the display advertising marketplace.  And in particular for search, it become a huge dagger to Google given the volume of higher quality desktop derived traffic AOL brings to the table.

But perhaps that biggest…and best…change that should come of this will be Google having to make drastic changes within its operation of the Google Search Partners network. For years, Google has obfuscated the data underlying Google Search Partners, disallowing advertisers the same publisher traffic source insight offered via the Google Display Network.  Advertiser we forced to trust Google and its “Smart Pricing” technology to make bid price adjustment based on Google’s sole discretionary evaluation of the traffic quality.

Agoogle-emperor-has-no-clothess many Advertisers have found over the last few years, the bar for entry into the Google Search Partners program was significantly lowered. These new entrants into the program have delivered substantially lower click quality which has led to the legal challenge now in the courts (Woods vs Google) wherein class action status is being pursued with regards to the Google Search Partner network and claims of substantial overcharging due to failures in the “Smart Pricing” technology.

With the exodus of AOL, we will soon find out whether the Emperor has no clothes.  Soon, we find out exactly how good the rest of those search partner sites really are and exactly how much click fraud was being hidden by having such a higher quality search traffic partner in AOL that represented such a significant share of the Google Search Partner network volume.

For the time being, Advertisers should continue to place their ads on the Google Search Partner network.  Once AOL officially switches to Bing, a full review of the performance should be conducted to establish new benchmark.  More likely than not, once the new benchmarks are defined, considerations for shutting down the remaining traffic will have to be made due to its significantly lower ROI performance.

Unless Google begins to provide full transparency of the publisher traffic source swith site exclusions and bid modifier functional such that is offered on Google Display Network, it is going to be hard for Advertisers to justify spending a nickle on the remaining Google Search Partner traffic minus AOL.

 

About Tim Daly

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