UK PPC: Is Microsoft Distracted in Paid Search?

Following its successful rollout in North America, Microsoft and Yahoo are focusing on rolling out the Search Alliance in Europe, starting with natural search results on Yahoo UK.

This move is largely welcome. With a UK market share of less than 10 percent for Yahoo and MSN, it makes more sense to manage campaigns on one interface. Right now, Yahoo staff are being trained on adCenter in preparation for moving their clients' campaigns over.

Filling in my agency's response to the European investigation into Google, I had to list a number of features of the AdWords platform. We all know the depth and breadth of development of AdWords outpaced Yahoo (and Overture) and comparative newcomer Microsoft a long time ago.

But where are the beta trials from Redmond? Where are the new initiatives, the new ideas from engineers that will differentiate the adCenter platform from AdWords, raise the revenue per search Microsoft receives, and grow loyalty with advertisers?

Try as I might, I can't remember the last "big" change or enhancement on adCenter since Microsoft launched a desktop tool similar to AdWords Editor.

Parallel Races

It's easy to sit outside a company and poke holes at their strategy. Microsoft has lots of intelligent, hard-working people who are pushing their search efforts forward -- sometimes despite other people internally, I suspect.

They've built a search engine, created a PPC platform, and started to take the fight to Google (but let's be honest, Yahoo's been the main loser and Ask was already fading away).

As Bing introduced new features and received attention, Google seemed to wake out of a slumber and started rolling out new features in search results, continued its relentless development of AdWords and, with increasing speed, the development of its display business through DoubleClick.

So the foundations are firmly in place from Microsoft. They're gaining traffic from their Yahoo deal and their own activities. Bing keeps adding new features.

But where's the innovation in adCenter? I'm not talking blog posts, research reports, or tools around-the-edge (which they are often good at); I'm talking hardcore, at-the-center innovation that every advertiser, big or small, will be able to use. Things like Google's sitelinks -- self-service, enhancing search results and, crucially from a revenue per search basis, raising CTRs (and often ROI for advertisers -- leading to increased budgets).

Several races are happening in parallel here. Market share is one, but there are others (e.g., innovation in PPC, further exploiting the connection between display and search).

Microsoft and Yahoo have strong experience in display and have done some work in this area -- but Google is catching up, fast. They may not have the premium level display inventory Yahoo and Microsoft have access to, but with remarketing in AdWords Google has made the sort of retargeting once considered the preserve of the most well-funded advertisers available to all.

Search marketers are adopting this tactic in droves -- but only on Google's platform or through third parties -- not adCenter.

What Could Microsoft Do?

So, if I think Microsoft should be innovating more in PPC, what would I suggest? The obvious example, sitelinks, bears some thinking about.

Sitelinks undoubtedly offer convenient ways for site owners to channel consumers into the right section of a site following a one-word brand search or ambiguous generic. The format and mechanics could be different -- sitelinks can be improved in terms of reporting data and control over which links are shown.

Is this copying an idea and developing it further? Yes. After all, Google wasn't the first PPC engine -- they took the idea and added engineering rocket fuel.

Several other areas spring to mind -- things Google is already doing, but not always that well: local information in PPC ads, incorporating feeds to enhance PPC ads (more control of which products display for which searches would be a start), and the ability to buy non-premium display inventory via adCenter for retargeting.

There are probably much better ideas out there, not to mention the ones bubbling away in the heads of engineers at Microsoft.

Do I feel Microsoft is distracted by the challenge of onboarding an increased volume of traffic, new advertisers, and training Yahoo!'s staff? Yes.

Do I hope we'll see a burst of innovation on adCenter afterward? Yes.

But underlying concern is it'll be too late -- Google will have moved ahead in all these races, and there will be new ones opening up that adCenter won't be equipped to enter. That will be bad for all of us in search -- especially those of us in a market where Google already dominates 90 percent of searches.

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About the author

Duncan Parry, COO of STEAK, began his career in search in 1999 at Lycos, during the early days of the industry.  

In 2002 he joined PPC engine Espotting and rose to the position of Agency Editorial Manager, working on campaigns for some of Europe's leading brands. He left Espotting in 2004 to work as a consultant in both paid and natural search, during which time his clients included publisher VNU's portfolio of UK IT, finance and recruitment websites.  

In 2005 he reunited with ex-Espotting colleagues to found STEAK. His roles at the agency have spanned PPC, SEO and Insight, as well commenting and writing in trade press for the agency, and contributing to STEAK’s social presence.