SpectatorBytes

Today, I read that Yahoo plans to spend in online and offline advertising for its search product according to Search Engine Land (See here). I find this interesting given Ask.com’s experience with ad campaigns.

While this may work to help Yahoo mantain search query levels, this initiative signals that they have not been able to break through consumers via product improvements. Offline and online ad campaigns can help companies capture impulse-driven user behavior and given the rich economics (read margin) of search, this campaign is likely to be profitable.

Nevertheless, this model does not seem to be sustainable in this new era of digital media. Interactive Corp. tried to do this with its search property Ask.com. They reportedly spent over $100M advertising their product. While they were able to increase share during the period, most of the benefits went away when the ad campaign ended.

Years ago, Scott Ferber (founder of Advertising.com) shared with me an interesting insight. The Web is a highly “Darwinistic” medium. If your product resonates with consumers, it will easily sell and certainly makes sense to advertise for it. However, if it does not resonate with consumers, advertising this product may make little sense as response will be low and lifetime of users acquired will be low and most likely unprofitable.

In this era of digital media and consumer empowerment, good products sell themselves. If they do not, changes to the product need to be made.

Yahoo certainly has a good search product. However, their consistent declines in queries suggest that consumers want more from the product. Advertising will not help solve this issue for Yahoo. Advertising may only help slow down the decline of Yahoo search but advertising alone will most likely not drive sustainable “organic” growth.

Do you agree? What do you think of Yahoo’s decision?