Bing now powers Yahoo search results and the transition of the paid search program, from Yahoo Serch Marketing accounts to new Microsoft adCenter accounts is now complete.
Those with experience running paid search campaigns will already have a fair idea of the performance they can squeeze out of Microsoft adCenter and how it compares to Google AdWords. However, for those who don't know already, here are some insights into the opportunity brought together by industry experts from enterprise search marketing agencies.Results of the Yahoo Bing Merger
According to Efficient Frontier's paid search marketing report (Q3 2010), Google was the biggest winner of the Yahoo/Bing merger due to market place inefficiencies during the following transition period of integrating both organic and paid search platforms.
During this period, Yahoo search traffic was in decline as it phased into Bing traffic and search ad cost-per-clicks were combined across the two paid search platforms. The net result was that adCenter footed the bill for a less efficient marketplace on Yahoo which delivered a significantly lower ROI.
While Google's share of paid search spend rose from 75.8 percent in Q2 2010 to 77.9 percent in Q3 2010, Bing share of search spend and clicks flattened -- yet it remained the most profitable of all the paid search marketing channels.
Aggressive Innovation from Google
Meanwhile, in spite of the merger, Google gained search market share on both Bing and Yahoo according to comScore's latest report. Yahoo's Shashi Seth, (Sr. VP, Yahoo Search & Marketplaces) was quick to protest that comScore's figures were skewed by Google Instant's new streaming search results format, arguing that users who typed slowly would perform more searches whilst they defined what they were looking for.
ComScore retorted that they only reported explicit core search data, of which, in the case of Instant they only counted searches that led to explicit actions. Google Instant results that appeared for 3 seconds with no further action, still counted, but were attributed to a different figure -- namely total core search.
Nonetheless, Seth raises an interesting point against comScore because the confusing part is that total core search should be all that advertisers care about because they are still paying for those 3 second impressions. With explicit core search growing at 3 percent, it must be even more alarming to competitors that Google's implicit core search volume increased by 8 percent.
This begs the question, do the streaming search results on Google Instant "fake" a gain in search market share when in fact there is less engagement?
If Marin Software's recent study is anything to go by then it would seem that cynicism is misplaced. Their findings strongly suggest that Google Instant was a good move for users and paid search advertisers -- impressions, clicks, and user engagement with search all increased.
In fact, results are so impressive that one could almost wonder if Google took a well-calculated risk to release Instant during a phase when there was a major wobble in the efficiency of the paid search market place in general. Whilst advertisers battled with lower ROI on adCenter, did Google instantaneously appear with lots more affordable inventory?
Losing out to another Google innovation is not great news for adCenter, but makes for an exciting time for search marketers, because innovation is exactly where this battle must be fought.Paid Search Market Efficiency
Despite Google gains, the mood of enterprise paid search marketers I chatted to was one of confidence about Microsoft's prospects. All had predicted that the share of search marketing spend on Bing would suffer temporarily from the transition and saw the process as a necessary evil.
Efficient Frontier's Director of Business Analytics, Dr. Sid Shah, commented that despite flattened share of spending over the transition, search advertising spend on Bing has been growing consistently at an average rate of 0.65 percent per quarter since it launched in May 2009, underlining the opportunity for marketers.
"With the addition of Yahoo traffic, adCenter represents approximately 25 percent of the US search opportunity making it a both a relevant and important channel for advertisers of all sizes," Shah said. "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."
Echoing the upbeat outlook, Matt Lawson of Marin Software said that search marketers had a lot to gain from the platform transition. Because Yahoo Panama will be decommissioned, market friction will be reduced as enterprise search marketers will have more time to spend on optimizing their paid search campaigns on Bing.Market friction will also be reduced simply due to the fact that the Microsoft adCenter and Google AdWords platforms closely resemble each other, meaning there is little duplication of effort in setting up or migrating campaigns between either.
Another piece of good news is that inherent cost inefficiencies within Yahoo Panama's "advanced match," a canonicalized broad matching system, means marketers are already in a process of optimizing their bids simply by migrating to Microsoft adCenter. Put simply, Yahoo Panama advertisers will no longer have to pay for misspellings and can target the long tail of search phrases more effectively.
Lawson also suggested that there was opportunity to mine in the combined keyword bids across Yahoo with adCenter's more refined keyword targeting system.
Less friction in the marketplace is good news for advertisers, users and webmasters in general. Easier campaign implementation across the board should mean that more advertisers will look to Bing to maximize their search spend.
In turn, more advertisers will make it easier for publishers to monetize their audience via a Bing syndicated search engine, making Bing syndication a more attractive search engine partner to bigger portals. This will create more ad inventory and reach, meaning the net effect of which will be more choice for users.Capacity for Innovation
For both Shah and Lawson, innovation is key to Microsoft adCenter's ability to offer a competitive alternative to Google AdWords and command a greater share of the search marketing budgets. However, one need only look back over the last 12 months at innovations within image, maps and social search to see that this is an area where Microsoft is proving itself to have a strong talent pool.
Speculating as to what form innovation might take, an obvious place to look was Facebook. Could this partnership change the paid search landscape?
Lawson pointed to findings from Facebook ad campaigns that discovered that users who were engaged with brands on Facebook were 2.3 times more likely to search using brand terms and 1.7 times more likely to search with purchase intent. He noted that companies built on Facebook, such as Zynga, were already using paid search to drive users to engage with their fan pages.
Social media's ability to fine tune search intent is a phenomenon that Microsoft adCenter is in the best position to take advantage of. The Facebook-Bing integration creates more incentive for smaller advertisers to come on board and drive traffic to their fan pages, as for a low price, a savvy advertiser and social media marketer can earn "purchase intent" and mindshare from their campaigns. While this strategy can be replicated on Google, Bing should drive a better conversion rate as Facebook data is overlayed on results pages.
However, merging search and social layers is a thorny issue and is almost beside the point as adCenter has a lot of catching up to do with all of Google's ad innovations.
So what about Yahoo? Alex Cohen at ClickEquations was bullish.
"[I'm” expecting a much more aggressive push from Microsoft," Cohen said. "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."
Indeed, Microsoft adCenter could look to their partnership with Yahoo in the meantime and explore how leverage Bing's search intent data to transform display advertising. Retargeted search data can multiply a single search query into 20 more touch points with a product over a month.
Close work with Yahoo's Right Media Exchange and Microsoft's Atlas could see adCenter provide a premium search retargeting network.
Yahoo also recently bought display ad innovation company, Dapper, which uses re-targeting data to create highly personalized ads based on feeds. A search for a holiday in the Caribbean on Bing, could have users being shown prices for flights to St. Kitts in a display ad on Yahoo or MSN.
In theory, such a close network could also be used to create two way retargeting, where display ads are retargeted to unbranded search terms. Where users have connected with a brand or a site previously, their own bids on related branded search ads could trump other advertisers despite a lower cost-per-click.
Less friction in the paid search market (and therefore more likely to create an influx of advertisers), combined with a need to reduce market inefficiency on Yahoo, makes this is a risk/reward model that adCenter can afford to take.
So, Microsoft adCenter may have taken a bit of a battering from Binghoo and Google Instant in recent months, but if they can keep driving out friction from the market and stay ahead of the innovation curve then adCenter will be poised to take a bite out of Google's lunch. As Mark Zuckerburg put it at the announcement of the Bing Facebook integration, Bing maybe "the underdog," but they're hungry!