Bing Ad Traffic Improving, But Still Not Enough

It’s been four months since Microsoft launched Bing at the beginning of June, so what’s the impact on advertisers?

According to reports from search marketing agencies SearchIgnite and Efficient Frontier, Bing is gaining ground on Google on the search advertising front. That matches up with Bing’s recent growth in search query share, as reported by comScore.

Bing came to market with a semi-vertical strategy, focusing on shopping, travel, health and local search. It’s also benefitted by its placement on some parts of the MSN network, such as MSN Money and MSN Autos. As a result, Bing ads have performed especially well in the Travel and Finance sectors, and to a lesser extent in the Automotive and Retail sectors, according to Efficient Frontier’s data.

Other advertisers have noted the vertical trend as well. Melissa Mackey, online marketing manager at Fluency Media, told ClickZ that her agency has several clients in the travel vertical that are seeing higher volume from Bing, some increasing by as much as 30 to 40 percent, without changing their PPC campaigns.

What makes it more impressive is that those clients would usually be seeing a seasonal downturn now, she said. For Fluency’s non-travel clients in e-commerce and business-to-business, there has been no change in volume.

Across all verticals, performance of Bing ads remains better than average, with a good conversion rate for Mackey’s clients, she said.

“With the clients we have on Bing, their campaigns are maxed out based on the traffic they can send,” Mackey said. “We have added new clients recently, who weren’t using Bing before, and had some success.”

Jason Tabeling, director of search and media at Rosetta, has seen both an overall lift in Bing ad volume, and a significant lift in the financial services vertical. Clickthrough rates have not declined since Bing’s launch, so the increased traffic is still performing well, as it did pre-Bing, Tabeling said.

“People are buying more, as Bing’s PR efforts have shifted the mindset of consumers to be more purchase-oriented, and they seem to be trusting the results,” he said. “I still don’t like the volume being as low as it is, though.”

Among Efficient Frontier’s clients, Bing has gained 0.9 percentage points of click share. In May 2009, clicks on ads from Bing’s predecessor, Microsoft Live Search, accounted for 4.06 percent of all search advertising clicks among Efficient Frontier’s clients. That number has risen to 4.96 percent in September 2009.

“While the numbers are minor in comparison to Google, they are incremental gains that should be looked on favorably,” Justin Merickel, VP of marketing at Efficient Frontier, told ClickZ. “Obviously they’re not game-changing yet, but they should give Microsoft reason to be happy.”

Besides the click share gains, there are signs that Bing is remaining a profitable place for advertisers to spend their search ad budgets, according to Merickel. Efficient Frontier’s data shows that Bing has gained in click share and spend share among its clients consistently since Bing’s launch in June.

Among Efficient Frontier clients, the return on investment (ROI) from Bing ads has declined slightly since June, though it’s up by 5 percent year-over-year. During that same period, their ROI on Google ads has continued to climb, and was up 47 percent year-over-year in Q3, Merickel said.

“Google has driven much higher ROI for advertisers. While Google has been getting more efficient, Microsoft has only been getting moderately more efficient,” he said.

But as long as Bing performs well, advertisers are likely to continue spending a portion of their search budgets with Microsoft, he said. “Advertiser sentiment is very positive for Microsoft. They’re worried about Google completely owning search, and want to see a viable competitor.”

One thing that may be keeping Bing traffic from converting as well as it could is the inclusion of syndication traffic in their overall impressions, said Jeremy Hull, account leader at Range Online Media. When Microsoft launched Bing in June, it also added in traffic from sites like Facebook and Tinypic, without giving advertisers a way to opt out of those sites when buying ads on Bing.

“Across the board, we are seeing increased traffic as their market share is continuing to rise. But as Bing’s traffic is increasing, this simultaneous syndication deal is lessening our excitement about this push,” Hull told ClickZ. “Our click-through rates post-Bing are slightly lower. It’s hard to say whether this is due to a decrease on Bing’s historically very qualified traffic due to the higher awareness, or if this is in relation to the partner network pushed live at the same time.”

Looming on the horizon is the impending deal with Yahoo, which will see Bing’s organic search and ad results replacing Yahoo’s on its properties, and could include some integration of Yahoo’s technology back into Bing.

“I think Yahoo’s delivery will be greatly improved. They currently lack a lot of the basic targeting functionality that give marketers a better ability to impact results, especially match types,” Tabeling said.

Range Online Media’s Hull agrees, adding that Yahoo’s paid search platform has been cumbersome and unintuitive. “Microsoft, while it does not have Google’s ease and functionality, will offer Yahoo a step up. They have emulated what has worked well for Google, and added bells and whistles like demo targeting,” he said. “Yahoo’s traffic, in conjunction with Microsoft’s ad platform, will offer much-needed competition in the marketplace, which is a positive for our clients and for their end customers.”

The biggest challenge for Microsoft will continue to be the low traffic that Bing ads can deliver. “Until that is resolved, our ability to spend more in this channel is going to continue to be limited,” Hull said.