AdGooroo report finds Microsoft is taking a quality-over-quantity approach with its relaunched search experience.
With its new search engine, Bing, Microsoft is taking a quality-over-quantity approach to advertising that is being reflected by a drop in first-page ads, according to a new report by AdGooroo.
The Chicago-based online marketing and keyword specialist says it measured a significant decline in first-page ads when Bing replaced Microsoft Live Search a month ago. AdGooroo's "Search Engine Advertising Update -- Q209" report measured a 5.5 percent increase in first-page advertisers in May, just before Bing was released, followed by a 3 percent decrease in June.
Rich Stokes, founder and president of AdGooroo, said he spoke with folks on the Bing team and is convinced the decrease in results is not accidental and is based on a concerted effort to display ads with the highest relevance from advertisers with the deepest pockets. "One of the things we look at is average number of ads per keyword," Stokes said. "Bing is interesting. The number of ads shown on the first page dropped quite a bit [after the launch]. That's usually a sign of increased focus on relevance and quality and I confirmed that with the people at Bing."
Stokes said the first-page ad numbers for Yahoo and Google have been "more or less flat throughout the year." Charts included with AdGooroo's report show both search engines display about 5.5 ads per keyword while Bing, in June, displayed about three.
Stokes said he did a number of tests, using search terms including "Hawaii," on all three search engines. While the Google and Yahoo results for "Hawaii" contained some ads that were rather far afield, Bing delivered three highly-relevant ads: one for Hawaii helicopter tours, one for Hawaii vacation rentals and one for Hawaiian tour packages, Stokes said.
"While this will go a long way toward improving user experience, it's also a boon for paid search advertisers, who have far less competition to deal with," according to the AdGooroo report. It includes a list of the top 25 advertisers on the three search engines and it notes that Microsoft has added some big names to its roster, including Dell, Sears, Hotels.com, Marriot and the Home Depot. "They are taking advantage of Bing's superior shopping and travel products which are drawing crowds of savvy surfers," says the report.
In June, Bing had about 13 percent of the total international share of advertisers, Yahoo had about 26 percent and Google had about 78 percent. AdGooroo said Microsoft increased its advertiser base by 35 percent year over year, outpacing Yahoo's 14 percent advertiser base increase but failing to come close to Google's 52 percent increase.
Advertisers aside, Bing appears to have had a solid first month as measured in terms of the only metrics that really matters at this early stage: user and query growth. According to Compete.com, Bing increased Microsoft's search market share by 0.3 points to 6.5 percent and did so during a period when the overall search market dropped by 1.7 percent and Google lost nearly 1 percent of its query volume.
StatCounter found that Bing and Yahoo were almost neck-and-neck in terms of search share. Compete noted that Bing also boosted Microsoft's rate of sponsored referrals to 5.6 percent and, in June, "yielded 80 percent more paid clicks than MSN/Live did in May."
In a blog post, Bing Online Audience Business Group SVP Yusuf Mehdi cited several success stories involving Bing advertisers. "Since the launch of Bing, TigerDirect has seen sales and order volume triple, and seen both conversion rate and average order size increase significantly," he wrote. "Based on this early success, TigerDirect has increased its search marketing spend with Bing by twofold."
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