Yahoo! Search Marketing Lowers the Budget Bar

Yahoo Search Marketing (YSM) is getting friendly with the “long tail” phenomenon as it plays catch-up to Google in wooing the little guys.

The company has extended a hand to smaller advertisers, taking a page from Google by abolishing its $20 minimum monthly spend for sponsored search. The move follows Yahoo’s step to embrace smaller publishers when it unveiled plans for the Yahoo Publisher Network. Previously, the company had only distributed ads via large partners.

“Ultimately, we are focusing our efforts on making advertising with us as easy and as rewarding as possible, for both our current advertisers as well prospective advertisers. This is just one small step in that direction,” said a spokesperson for Yahoo Search Marketing in an email exchange.

The move will likely make YSM more attractive to both small spenders and those who want to run one-time campaigns or seasonal efforts. Because of its minimum spend requirements and the perception that its user interface is too complex, Yahoo has long ceded many smaller advertisers to competitor Google.

Google has done extremely well with its strategy of embracing small advertisers and publishers. Last week, the company posted third quarter revenues of $1.6 billion, in which network revenues accounted for 43 percent of the whole, or $675 million. Yahoo’s revenues, by contrast, were $1.3 billion, and it offers brand advertising and subscription services in addition to pay-per-click ads.

Yahoo also said it made the decision based on advertiser feedback. Advertisers told Yahoo they would be able to manage their accounts more easily without the minimum spend requirement.