Is Yahoo Gaining Momentum?

While Google clearly retains the dominant market share among search engines, it appears that Yahoo showed some strength this summer with “impressive momentum,” according to a report by SearchIgnite and RBC Capital Markets.

“Relative to its own market share, it was an impressive gain,” said Roger Barnette, president of SearchIgnite. “It appears marketers are becoming more comfortable with the Panama platform. We expect this trend to continue in the fourth quarter.”

The research shows that Yahoo posted significant quarter-to-quarter gains in both share of search ad impressions and percentage of media spend. At the same time, Google’s share of impressions dropped considerably during the summer, but rebounded due to back-to-school traffic in September. Yahoo was apparently unaffected by the seasonal shift.

Spending on Yahoo outpaced the overall spend increase, showing that as marketers increase their ad spend, they are more likely to allocate that budget to Yahoo. Overall spend increased by 1.8 percent from the second quarter, while spending on Yahoo was up by 7.8 percent, and spending on Google was up just 0.8 percent.

“This should tell marketers that if they’re not looking at other engines, they might want to consider doing that. Many of their competitors are,” Barnette said.

The data comes from more than 500 clients of SearchIgnite and its sister company, 360i. This is the fourth quarterly report, intended to measure the changing budget allocations between Google, Yahoo, and Microsoft Live Search/MSN. SearchIgnite is especially interested in tracking the effects of Yahoo’s implementation of Panama as well as changes Google has made, such as the shift to universal search.

One surprising point for Barnette was the lack of a noticeable uptick following Google’s algorithm adjustment that tweaked the way the top ad position is calculated. Both Google’s average cost-per-click (CPC) and effective CPM were flat after the late August move, where previous changes had boosted those metrics more dramatically, he said.

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