Manila, Philippines — Hoping to attain dominance over its rival and search-advertising behemoth Google, Yahoo! Inc. introduced its keyword-based advertising service, pushing it new advertising platform into emerging markets in Southeast Asia, including the Philippines.
The program widely known as “Project Panama,” this sponsored search marketing product leads highly-targeted customers to businesses by displaying their ads as paid search results across the Web.
The new service allows online businesses to bid for keywords users enter into the company’s search engine. Tough competition among bidders will jack up prices, translating to higher sales for Yahoo! which is a leading global Internet company. A travel agency, for example, can bid for keywords “Boracay resort” in order to put itself on top of search results.
The project is based on a “pay-per-click” model, meaning advertisers only pay when the user clicks on links leading to their websites.
Yahoo is introducing the service on a per-country basis in the region, playing up to its strategy of going after emerging markets like Southeast Asia. The company is targeting for small and medium businesses who may want to channel resources instead on a non-traditional advertising medium such as the Internet.
In the Philippines, though, Yahoo may be confronted by lack of Web familiarity among businesses, a fact acknowledged by Jojo Anonuevo, who heads the company’s local operations.
“It depends on how fast local companies begin adopting Web advertising. A lot of these companies still need to get online,” Anonuevo said when asked about the potential market for Yahoo locally.
But whether the latest accomplishment would narrow the gap between Google’s and Yahoo’s advertising revenues remains a question. Google’s worldwide revenues totaled $11.8 billion in 2007 while that of Yahoo! only amounted to $6.97 billion.
Anonuevo, however, said the new service is enough to capture a portion of the region’s total ad revenue and grow Yahoo’s bottom-line.
He said in the Philippines alone, total ad spending amounted to P154 billion in 2007, but only one percent of this was accounted for by the non-traditional medium, the Web.
“However, we are expecting this share to grow to 2-3 percent this year, with new advertising platforms such as ours,” he said.
With most of the businesses categorized as SMBs — more than 780,000 to be exact, according to Yahoo — the company is optimistic about Web advertising’s potential in the Philippines. Yahoo said it has 53 million users in Southeast Asia alone.
“The challenge for Yahoo is positioning because they obviously do not have first-to-market advantage,” said Donald Lim, chief executive of Yehey.com, which “resells” ad services locally for both Yahoo and Google.
Lim, however, believes the local market still offers a lot of opportunities for both companies.
“The Philippines may be a good battleground since online advertising is just gaining ground,” Lim said in a statement.
“It is just a matter of educating companies. And that is what we are working on through this aggressive launch. In no time, we see this mode of advertising becoming more and more popular,” said Anonuevo.
Locally, Yahoo has said it intends to become a “must-buy” for advertisers after creating localized versions of its services, including search and email, also available on mobile phones.
“Yahoo is not even positioning its service as an alternative to Google. I believe it wants to take on Google head-on,” said Lim, who is also president of the Internet and Mobile Marketing Association of the Philippines (IMMAP).
“A challenge for Yahoo is to offer something of value to advertisers that they would not get from Google’s service,” Lim said.
In an interview during the Yahoo briefing, Anonuevo suggested the company will strengthen its sales presence in the country. On the other hand, Google has appointed a lone executive managing its sales activities in the country.