Today Yahoo! and Microsoft announced that they have completed a major search alliance milestone in both the U.S. and Canada. Starting today, Microsoft Advertising adCenter will power 100% of the paid search advertisements on both Bing and Yahoo! owned and operated properties and publisher networks in the U.S. and Canadian markets.
Advertisers will now be able to reach 163 million searchers in the U.S. and 15 million searchers in Canada via a single account in adCenter. Managing a single account for both Bing and Yahoo! promises to save advertisers time and simplify campaign management.
This announcement comes just in time to start paid search campaigns for the holiday season. In particular, the search alliance creates a competitive alternative in search engine advertising for small to medium sized businesses who previously struggled to manage campaigns across multiple engines, or could not attain significant reach via Bing or Yahoo alone.
The graph below, from Efficient Frontier's Q3 2010 report, shows that Return-on-Investment (ROI) from Bing has traditionally been higher than Google, as much as 20% in previous quarters, and has remained higher in Q3 of 2010 whilst undergoing the search alliance transition.
Dr Sid Shah, Director of Business Analytics, at Efficient Frontier also provided some of their data on the overall growth trajectory of Bing, demonstrating a continual average growth of 0.65% of total paid search marketing spend share every quarter.
Yahoo paid search advertisers following this story, should have already transitioned accounts to adCenter. Those advertisers who currently only use Google Adwords should find significant similarities with the Microsoft adCenter targeting options and easily be able to import their campaigns.
Now that paid search marketing on 'tier 1' portals is brokered between only two major providers in the USA and Canada, this may be an opportunity to more effectively reach more users than ever before via a comprehensive multi platform paid search strategy. This search alliance should have a wide ranging impact on the paid search marketing business in general. Some likely benefits are:
- Quicker to Market - similarities between the two search engine advertising platforms will mean that more advertisers will enter the market, causing a gradual increase in cost-per-click (CPC) prices. However, a more volatile and competitive keyword auction will naturally create more opportunity for smart marketers.
- Better Targeting Options - Microsoft adCenter has more granular and exact targeting options than Yahoo's former search advertising platform, Panama. This means that the net ROI for high performing keywords on Google AdWords will be even lower when combined with the combined reach of Yahoo and Bing.
- 30% of Campaign Management Time Returned - With managing campaigns on Yahoo now out of the picture many search marketers will be able to spend more time maximizing ROI on the combined Yahoo / Bing offering.
- Increased Paid Search Market Efficiency - with time spent managing campaigns returned and budget wastage on Yahoo minimized, marketers could see more gaps for campaign improvement as competitors also refine their own spending.
Mood of the Industry:
"We're very proud of what we've been able to accomplish alongside Microsoft. The work that has been done will go a long way to drive better performance for our publishers and advertisers. And Yahoo can now focus on innovating search for our users." - Chi-Chao Chang, VP and GM of Global Search Business for Yahoo!
"The combined Microsoft adCenter offers a clear benefit to advertisers by consolidating the market to two platforms. We're helping advertisers save time and simplify their campaigns, while allowing them to get maximum value for the combined supply across Bing and Yahoo!" - David Pann, General Manager, Microsoft Advertising Search Network
"The transition has been rather seamless but the combination of searchers from Bing and Yahoo without separation negates the years of work differentiating the audiences. For some terms, ads and landing pages worked differently - now we only get one message going to both engines. There should be the ability to use the one interface but isolate searches by engine. Now we need to hope they average out or we start dropping terms."
Frank Watson, Owner, Kangamurra Media
"Google's ad formats have changed radically in the past year (if you're catching up, check out their Ad Innovations site). But, the AdCenter team has largely been focused on the integration with Yahoo. When the dust settles, I expect a much more aggressive push from Microsoft. In particular, I think they'll leverage their access to Yahoo's significant display inventory and the Right Media Exchange to offer more controls for retargeting or display buys through AdCenter."
Alex Cohen, Senior Marketing Manager, ClickEquations
"With the addition of Yahoo! traffic, AdCenter represents approximately 25% of the US search opportunity making it a both a relevant and important channel for advertisers of all sizes. We believe that AdCenter will continue to innovate its product in order to grow share and ultimate compete more substantially with Google, which is good for the industry overall."
Dr. Sid Shah, Director, Business Analytics, Efficient Frontier