Recently I was on YouTube and saw an extremely generic advert for “Debt Consolidation Loans” underneath the video I was watching. What caught my attention was that the advert was by Yahoo Search, rather than a loan company.
So why was Yahoo using Google Display Adverts to advertise loans, and where does the advert link to?
First part of the question; Google Display Ads allow you to get a lot of website traffic for not a great deal of money (especially if it’s not targeting a particular demographic), and generally speaking Google are good at ensuring that the traffic will be relatively authentic, or at least authentic enough to fool website analytic software.
The Google Display advert Yahoo was paying for linked to a Yahoo Search page with the pre-searched term “Debt Consolidation Loans”.
Upon landing on the page you see the first four results which are paid promotions (Pay Per Click adverts, or PPC for short), but in my screenshot I scrolled to the bottom to show that their PPC adverts are powered by Bing.
Searches for “Debt Consolidation Loans” have a high cost-per-click (CPC). On Google Search, the CPC can go up to £22.32 when advertising across the UK. The lowest estimated CPC for first page results is £3.72, making an average CPC of £13.02.
Yahoo are using Google Display Ads to bloat the amount of website traffic appearing to search for “Debt Consolidation Loans”, hoping that some of the website visitors click on the PPC adverts, which will then generate them revenue through the illusion that those people were searching for “Debt Consolidation Loans”.
So the finesse is simple; use Google Display Ads to send traffic to the pre-searched page, and then generate revenue on each PPC advert clicked on.
I’m not interested in loans, especially not “Debt Consolidation Loans”. Which means that Yahoo are just advertising to a generic demographic (resulting in the CPC they pay being less).
So, Yahoo pays Google a low CPC, and then are able to charge Bing a high PPC (by making it seem like the demographic has searched for these competitive search terms).
Part of why Yahoo are targeting “Debt Consolidation Loans” is because of the current economy. From Bing’s perspective, it seems logical that searches for the term have increased. In actuality, it’s because of Yahoo’s sneaky finesse. Of course, Yahoo have also targeted the term because it makes a high amount of revenue per click.
So how much money are Yahoo making?
Realistically, if they’re advertising for a completely generic demographic with their Google Display Ads, they can be paying £0.01 – £0.05 per click. To calculate how much revenue they are making, let’s say they’re paying £0.02.
If Yahoo are charging Bing an average of £13.02 for the top search positions for “Debt Consolidation Loans”, they can potentially be making £13.00 when someone clicks on their Google Display adverts.
Even if only 0.5% of those that click onto their Google Display advert proceed to click on one of those PPC adverts on Yahoo Search, that’s a cool £9.02 in revenue.
No doubt Bing has a policy against this kind of practice. If they don’t, Yahoo have hit a goldmine.
Hope you enjoyed this article, if you want to read more about advertising and business, subscribe to receive more:
SIR THORNEY 