There’s a fascinating bit of traffic arbitrage going on right now by whomever it is that owns Yahoo! search nowadays.
UPDATE: turns out this is part of a larger digital display strategy, which has been covered here
I first noticed it when I was served a Facebook ad for what seemed like an oddly specific low-funnel search term . The ad had custom creative for that specific term and clicked through to the usual SERP (search engine results page) for that term on Yahoo search.
At first I thought that some random advertiser was pulling a creative workaround to get their Yahoo search CTR up, but then I realized two weird things:
- The ad was served from the official Yahoo! page on Facebook
- instead of the usual 5 ad results preceeding organic results, this page showed 10 ads.
What’s going on? A quick peek at Facebook’s Ad Library shows that Yahoo is running ad campaigns on Facebook for high-profit search terms, with some terms like COPD having hundreds of ad creative variations.
Here’s how I think it works:
- Yahoo looks at what terms in their advertising database have high CPCs.
- They then take that list of terms, and try to match them to targetable interests in Facebook’s advertising tool.
- Next, they throw together some quick creative (stock images + the search term, mostly) and post the ads.
- Facebook serves the ads to their users, who click on them and are taken to Yahoo’s search results. Because the top 10 results are ads (and almost indistinguishable from organic results), those users then click on an ad, netting Yahoo a CPC.
This isn’t the only time you see one platform advertising on another. Part of TikTok’s enormous growth has been driven by making ads from the best content they have on their platform. However, it’s the first time I’ve seen a search engine drive traffic to their own SERP, and then modify that SERP to drive more revenue.
It raises a bunch of questions that I’d be curious to know the answer to:
- What’s the margin for Yahoo like between what they’re paying for clicks on Facebook and what they’re making from clicks on their own ads?
- Is there a play here where Yahoo thinks this is driving more overall engagement with their search engine, thereby perhaps justifying a tiny (or non-existent margin)?
- Are these ad creatives being made by hand, or is there a tool that auto-generates them and auto-bids?