Beginning in mid-July, Yahoo and Bing began the transition of their systems and completed the transition last week. There are some interesting data points regarding Yahoo and Bing which marketers should understand as they manage their campaigns in the fourth quarter:
- Historically, Bing has proven to have higher ROI than Yahoo, driven by similar CPCs but higher conversion rates.
- Google now stands at more than 80 percent of PPC ad spend in the U.S., up nearly two percentage points from just last quarter, and taking the most dominant market share lead since SearchIgnite began tracking spend share among the engines (2007). Yahoo/Bing will need to work hard to reverse this momentum.
- Paid search spend in Q3 increased 5.8 percent year-over-year compared with flat growth a year ago and exhibited positive momentum month-over-month, with July growing 4.9 percent, August 5.8 percent, and September 6.7 percent. The growth throughout the quarter bodes well for a strong Q4.
Search Alliance Numbers: Troubling Trend?
Although we saw some encouraging performance numbers from the combined platform during the initial stages of the transition, these have regressed a bit. If you look at overall performance of Yahoo and Bing separately before the transition and combined for the first week after the transition, we see the following trends:
- The average eCPM differential (SearchIgnite's measure of effective cost per thousand impressions) between Yahoo/Bing and Google has increased from -5.33 to -6.19, reflecting a 14 percent decline in the relative efficiency of turning impressions into dollars. This is mostly due to a decline in relative CPCs.
- Impression share has dropped on the combined platform from 29.6 percent to 25.3 percent, resulting in less relative money being spent on the combined platform (21.9 percent to 17.5 percent).
While it's too early to give more meaningful statistical insights on performance, the trend doesn't bode well for the Yahoo/Bing search alliance. The gains by Google could be caused by the uncertainty of the transition, so the fourth quarter will be especially important for the search alliance and for search marketers.
What This Means to Marketers -- Insights and Tips for the New Platform
When it comes to discussing how to manage in the new combined platform, there are two main areas to focus on:
- How to bring your old Bing and Yahoo structures in line with the new entity to get the most out of it. For many advertisers, this will involve making their new account similar to their Google account -- building out match types, doing away with Yahoo canonicalization of keywords (for both plurals and misspellings, etc.), and so on.
- Understanding what makes this new platform different from Google. One main differentiator is the ability in Bing to apply unique keywords and bids for the partner networks. To take full advantage of this, break out your campaigns to target Bing's "O&O" search, partners, or both. This will allow you to more effectively optimize keywords based on the audience as well as monitor performance between search and partner networks.
Another differentiator is Bing's demographic targeting capabilities, which aren't currently available in Google. It'll be interesting to see what kind of impact these can have on a bigger audience.
The gap in ROI between Bing and Google is one differentiator that may actually decline.
You often hear advertisers say, "My ROI in Bing is higher, but I just can't get the volume." Well, now volume will be higher, but that doesn't mean you should expect to maintain that same ROI.
Early results show that the quality of clicks coming from Yahoo isn't as high, meaning the ROI gap between Google and Bing may very well shrink.
Advertisers would be smart to keep a close eye on changes to their ROI. Don't expect the extra volume to be a free gift, but also don't assume lower ROI means you're doing something wrong. It could just be a natural occurrence in the combined Bing/Yahoo landscape.