Is the search about to get less strenuous?
Will the Search Alliance of search engine minnows Yahoo! and Bing be enough to kick-start a marketing migration away from big fish Google?
Marketers will need no reminding of the imbalance between the amount of work required to be active on the country’s three major search engines, and the relative returns.
With Google representing around a 90% market share and Bing and Yahoo! only offering a combined penetration of roughly 7-8%, putting in the same amount of effort to run three individual campaigns has always seemed disproportionate.
The Bing and Yahoo! Search Alliance aims to put an end to this by combining the two marketplaces, encouraging brands to look beyond Google and have both Bing and Yahoo! added to their pay-per-click (PPC) strategies by only having one campaign to reach across both.
This PPC alliance is due to be sealed by the end of the second quarter this year in the UK (it has already happened in America) and will be preceded by Bing’s algorithm being used for Yahoo’s natural search listings by end of March. Although this will make it easier for brands to look beyond Google, Jon Myers, head of account management at Yahoo! claims market shares and simplicity are not the only reasons behind the move. Instead he insists the two search engines believe they are stronger together than apart.
“We’ve come together to give advertisers more choice and to make it easier for them to connect to the high-quality audience and good conversion rates we can offer,” he says.
At the same time Mark Richardson, Yahoo! Search Alliance lead for Microsoft in the UK, is keen to reassure advertisers the transition will be “as smooth as it was in the US” and will offer seamless access “to the high value of the Alliance’s traffic”.
Certainly the combination of Yahoo! and Microsoft seems to have had an impact in the US. According to research by paid search management platform Marin Software, the Search Alliance has increased its share of paid search impressions there by 4% and its share of clicks by 2%. It also seems to have led to improved quality traffic for advertisers, with conversion rates up by 12% during the research, while cost-per-click was 20% below industry benchmarks at the end of 2010.
Brands need to be aware how important social search is going to be
Emma McLaughlin, John Lewis
However, this research comes with the caveat that the US market landscape is very different from the UK’s. Before the alliance in the US, Yahoo! and Bing had a combined market share of 30%, compared to 7-8% in the UK.
While dealing with one combined PPC service rather than two may sound a small step, for companies that rely heavily on search it is a major benefit. Gareth Ilbery, PPC manager at Golfbreaks.com, believes the Alliance will make managing the many campaigns he runs through his search agency, Guava, much simpler.
“We do a little bit of Bing work already and to be able to spread that across Yahoo! as well, without having to set up a separate campaign, is going to save us so much time and effort because Yahoo! has traditionally been the most cumbersome software to work with,” he says.
“We’ve found Bing provides good quality traffic which converts well and we’ve also found it’s important to be on PPC there because, in our experience, Bing users tend to generally go for the top listings, whether they’re paid search or natural results. We think it may be that they’re slightly less experienced than searchers on Google but, whatever the reason, it’s important to be on the top at Bing, through PPC or SEO.”
Although it will certainly make things easier for all involved in PPC, Ottakar Rosenberger, country manager for dating brand eHarmony, believes the major issue for the Alliance will be the quality and volume of traffic it can generate. Like many marketers he believes the analytics and feedback from his search agency, Essence, show there is a noticeable difference between Yahoo and Bing’s traffic that, at the moment, marketers can choose to target or avoid. When they are part of the same network, though, this choice will be ended and, many will fear, the cost-per-click may rise.
“Everyone’s going to have a concern that PPC rates will go up if more people put more budget into the Alliance,” he says. “So that’s something everyone is going to have to watch, although our experience in America was that this didn’t happen. The real issue, though, is the quality of traffic. In our experience, Yahoo! tends to have a younger, less affluent audience that is heavily into entertainment, whereas Bing is a little more affluent, a little more business-oriented and we find it gives better returns than Yahoo!. Of course, we won’t have a choice when the alliance takes place so we’re going to look very carefully at return on investment.”
One major change the Alliance may bring could be to get brands that have not used Bing before to set up campaigns in advance. This will not only enable them to get a glimpse into managing campaigns on the platform, but will also enable them to have some analytics in place ahead of the alliance so they can determine what impact the coming together has had.
Certainly, leading workplace clothes retailer Xamax is currently setting up a Bing campaign, through its agency Rippleffect, because director Gareth Thompson believes it makes sense to know about the technology and site performance before the alliance takes place.
“We’re setting up on Bing to get the foundations in place for when the Search Alliance happens and hopefully it will have larger volumes to make it worthwhile,” he says.
“On its own, there wouldn’t be the volumes there, but when Yahoo! traffic is added and hopefully they grow their share, there should be growth and we need to be there. We’ve generally found that Google provides us the best B2B traffic, but that could simply be because of its huge volume. We think Bing is diverse and has young people at one extreme but more serious older business users at the other, so we would hope to attract that B2B audience.”
This notion that, regardless of volumes, the Alliance warrants closer inspection is the major message marketers should take on board in the run-up to June’s amalgamation, according to Emma McLaughlin, head of online acquisition and retention at John Lewis.
In her experience, while it is true the Alliance will not have the volumes to rival Google, it still represents a sizeable proportion of a brand’s online customer base and this could rise, particularly around social search.
“I think a lot of brands may be a little too quick to put off using Yahoo! and Bing, but if you have a big online presence I don’t think you should write off an alliance that accounts for around 8% of the market,” she says.
“We beat the £500m revenue mark in 2010, so something near 10% is a force to be reckoned with and we’re very excited about the Alliance.
We use business management software called Kenshoo to spread our budget across the three search engines based on what people are searching for, what we have told the software we want to push at any particular time and, crucially, what we have in stock. We have more than a million keywords and keyword combinations to monitor – it would be impossible to do that across all three search engines without this help.”
McLaughlin further believes that the next major innovation in both SEO and PPC will be social search, and companies should bear in mind that although Bing’s volumes may not rival Google right now, its deal with social network Facebook could have a big impact.
“Brands need to be aware of social search and how important it’s going to be,” she says.
“So many people have Facebook as their home page and so it’s a natural extension that they’re going to start searching the site, and the wider web, from that page. There’s talk of Facebook Mail launching soon and then we’re only a hop skip and a jump away from people searching the site, through Bing, for what their friends and their friend’s friends recommend in addition to using a regular search engine site for the web.
“Brands have to be aware of this inevitable trend; getting involved in social media, working with Bing, and soon the Search Alliance, is going to be an investment in the future.”
While brands await answers to the fundamental questions of what the Alliance will change, perhaps the major impact will be from Bing and Yahoo! themselves. Myers and Richardson have revealed there will be marketing activity later in the year to encourage web users to search through Bing and Yahoo! in the hope this will push the Alliance’s share of the market above 8%. Both companies know that it is only by increasing usage of the search engine that they will provide more volume and ensure online marketers no longer just rely on Google for PPC traffic.
VIEWPOINT
Stephanie Carr
European commercial
director
Marin Software
The formation of the Search Alliance was huge news when it was announced back in 2009. Now, after all the hype and discussion, what advertisers want is a smooth and successful transition to Microsoft’s adCenter. We know from our US clients that the migration has been handled professionally, and our research shows positive results so far, with increased volume and decreasing CPCs and CPAs. This is reassuring for UK advertisers, who can learn from the US experience.
While we expect the impact of the UK and European Search Alliance to be diluted – Google has a 90%-plus share of the market and most large advertisers are already running campaigns across all engines – advertisers still need to prepare their campaigns to deal with all eventualities.
If you don’t have coverage on all engines, or if you think your non-Google accounts may be under-optimised, now is the time to perform a full gap analysis. Advertisers should also prepare budgets for the changed environment. You don’t want to do all the hard work but not have the budget allocated to benefit from a potential surge in user queries.
We’re also urging clients to review their tracking and account for differences in parameters across the search engines to avoid inaccurate revenue attribution and bidding. Monitoring activity changes during the transition will ensure you can act quickly to optimise your campaigns.
The key for the Search Alliance’s success will be driving increased, good quality search query volumes. To do this, and leverage the potential tipping point they have created in the US, will require continued innovation. Beyond the Alliance, Microsoft’s tie-up with Facebook is an exciting step as integrated social search results become a reality. Google may be refusing to see Facebook as a search contender, but it’s a big influencer in the space. Bing has recognised this in its recent toolbar update that leverages Facebook and keeps users in the Bing environment for longer. Microsoft is clever to be taking advantage of Facebook’s popularity and it will certainly appeal to users. This kind of innovation and continued seamless execution is taking the Search Alliance in the right direction.
It’s just been a long time coming.
topline trends
- The Yahoo! and Bing Search Alliance will see the Bing algorithm power natural search across both services from the end of Q1 and a single marketplace for PPC by the end of Q2.
- Google has a 90% share of the UK search market with Bing and Yahoo! offering a combined 7-8% market share.
- This smaller percentage has meant that not all brands try all three search engines, but many more may do so now the two audiences can be reached through one campaign, saving time and effort.
- Marketers report that while Google always provides volume, Bing provides smaller levels of high quality traffic; the key will be if this can be carried on into the Alliance and improved further.
- Brands are keeping an eye on Bing because it has a deal for search on Facebook which will mean its PPC results will show up on web searches conducted via its site.
- As search becomes more social media based, this presence on Facebook could become vital if people start to search for friend’s opinions and posts, with accompanying PPC listings.
- One way to get better value for PPC campaigns is to look for longer keywords that can be directed to a dedicated part of a site which, in turn, can be supported by blogs to improve natural search listings.
viewpoints
the hotelier
Paul Flynn
Online marketing manager, Jury’s Inn
We think the Alliance could be good for us. Anything that breaks Google’s monopoly in the UK and Ireland has to be a good thing, in our eyes.
In the hotel industry there has been huge competition because even though many firms are decreasing their marketing budgets, they’re putting more into PPC because you only pay for the traffic you’re sent. It’s meant that there is now fierce competition, particularly around short keywords.
So, with our search consultancy, Cybercom, we’ve been putting a lot of effort into marketing around events that are taking place near our hotels by ensuring we have a dedicated page on the website for them. We can drive traffic to the relevant page, through PPC, with a longer search term that will not have as much competition, so it will be cheaper than a generic keyword.
This approach is really good for a rounded search programme because it gives us some good natural search listings. We’ve got onto page one for hotel searches for O2 events for which we’ve set up pages on our site. The pages are good at converting because we give a lot of information about the event as well as details about our free shuttle buses.
To get traffic to these pages, we blog about them for a couple of months ahead of the event. You can’t expect immediate results, but if you can get people reading about it on your site, and linking to the page, it’s great for SEO and you can also use a longer keyword combination to be driving very specific traffic to the event’s page.
the retailer
Phil Raynor
Head of eCommerce,
Austin Reed Group
Like many other businesses, we cover all the major platforms, with the majority of our paid search activity placed via Google. Managing campaigns through three different search engines requires a lot of resources; obviously Google brings the most returns, justifying the lion’s share of investment.
If there is an advantage of the Bing and Yahoo! alliance it will come through economies of scale in the time and effort of managing campaigns. Using one interface would reduce the resources required to run a campaign, increasing potential ROI.
Despite this, we’re yet to be convinced the returns would justify a marked increase in investment. In the UK, Bing and Yahoo! combined holds less than 10% market share, but it takes the same time to optimise their campaigns as for Google.
If the Alliance delivers increasingly relevant results, no advertiser will be able to afford to ignore it. That said, it will be interesting to see how bid prices change. One advantage that Bing and Yahoo! enjoy is the lower comparative cost of appearing at the top of their listings. If the Alliance leads to more advertisers investing and market forces pushing up cost levels to those seen on Google, the extra investment will only truly be worth it if the relative market share or returns increase.
We work with UK- and US-based digital consultancy, Reform, and their experience in the States has been that the merger has yet to have a major impact.
