The Marketing Experiments Journal compares MSN and Yahoo! Search Marketing with some eye-opening results.

The arrival of MSN in the PPC marketing space had plenty of people speculating and asking a variety of questions with regard to cost per click and cost per action. Recently we decided to test Yahoo! and MSN head-to-head.

We chose four research partners, each in very different areas of business, and ran PPC ads for each of them on both Yahoo and MSN.

As you can see from the table below, while the difference in conversion rates between the two was not significant, the Cost per Action was substantially lower with MSN in three out of four cases.

Across these four advertising accounts, the CPA on MSN was lower by an average of $38.24, or more than 60 percent.

What is the reason for the lower CPA at MSN? 

One contributing factor may be that the minimum cost per click on MSN is only 5 cents, as opposed to 10 cents at Yahoo Search Marketing. However, the principal explanation for the lower CPA on MSN is almost certainly that many online marketers are not yet using MSN.

In other words, the competition for keywords is not nearly as intense on MSN as it is on Yahoo Search Marketing.

You'll find a full archive of our test results, and analysis within the MarketingExperiments.com Research Archives. The Marketing Experiments Journal publishes primary test results from work with our research partners once every two weeks. Subscription to the Journal is free and gives you full access to both our archives and teleconference calls. Subscribe here.