Not long ago we used to tell our clients that we could get them more traffic and a better CPC with Yahoo!. This did all change with the new Overture / Search Marketing system last January, however it appears things will be getting worse.  Advertisers could end up paying 22% more for search terms on Yahoo if the Web giant’s proposed paid search partnership with Google comes to fruition.

The search management tech and services firm released the “Potential Impact of a Google-Yahoo Partnership & Cost to Marketers” report just hours before the two companies’ top legal brass met with the Senate Antitrust Subcommittee to make the case for their deal.

Yahoo has maintained that it would only tap Google’s paid search platform to better monetize long-tail terms, or keywords and phrases that are very specific and not highly trafficked. But the SearchIgnite report found that Yahoo stands to gain significantly if it turns over the sale of some head terms (commonly searched-for words or phrases) to Google as well, particularly for ads that show up in the fourth position or lower.

The research stems from SEM Company’s SearchIgnite’s analysis of six month’s worth of clicks on 15,000 keywords and phrases, and the average cost-per-click (CPC) that advertisers paid for said terms on Google versus Yahoo. For each comparison, the keywords had to have occupied the same position (or rank) on both search engines at the same time.

Not surprisingly, SearchIgnite’s clients paid a premium for long-tail terms on Google as opposed to Yahoo. But for head terms, CPCs on Yahoo tended to be 5-16% higher, particularly for an ad in one of the first three positions. And with branded terms–keywords featuring a company or brand’s name–advertisers tended to pay almost 38% more for the number one spot on Yahoo as opposed to Google.

While the stats bolster Yahoo’s arguments that its Panama search platform actually performs better for head and branded terms than many in the industry seem to think, SearchIgnite’s data does highlight additional areas where the Web giant could stand to profit from outsourcing to Google. And that’s why some advertisers are concerned.

“The fear is that by increments over time, Google’s algorithms and ranking will dominate Yahoo’s results and competition will be reduced,” said Rob Norman, CEO of GroupM Interaction Worldwide. “If the partnership results in increased monetization for both Yahoo and Google, we’d be surprised if Yahoo’s shareholders and management didn’t seriously consider allocating more of their inventory than is being suggested in this initial phase. And the only party that’s going to pay is the advertiser.”