Overture Sees Growth From Traditional DMers

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After building its advertiser base with small businesses, Yahoo's Overture Services sees its biggest growth opportunity from large, traditional direct response advertisers.


David Karnstedt, general manager of direct business at Overture, said the paid search provider's focus is not on rising competition from Google but following its parent company's lead and luring money from traditional direct marketers.


"Our real challenge is not necessarily the other people that participating in the search space but shifting dollars from other direct response advertisers, like direct mail and yellow pages," he said at yesterday's Piper Jaffray Technology Conference in New York.


Search advertising drew $2.5 billion in 2003 compared to $48.6 billion for direct mail and $14 billion for yellow pages.


Yahoo's chief sales officer Wenda Harris Millard trumpeted the turnaround of the portal's brand advertising unit to its focus on industry verticals and the largest advertisers in those sectors.


"We're really focused on those top echelon advertisers," Karnstedt said. "Those are the type of people who help us drive our key economics."


To appeal to larger advertisers, Karnstedt said Overture would offer a portfolio of direct response vehicles. He said Overture would introduce its local search product this quarter and expand its performance-based product line to include its keyword search advertising, contextual listings, and paid inclusion.


The wide array of products, he said, would appeal to traditional direct response advertisers just getting fully involved in search marketing.


"What we're seeing amongst our most sophisticated marketers is less of a focus on the unit price, or price per click, and more of a focus on the overall return," he said.


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