eBrandz Blog

Microsoft-Yahoo duo takes on Google Search; shakes up search advertising

Google may ultimately face some real competition in the domain of search it has thoroughly dominated for last so many years sans any serious competition. However, with the integration process of search businesses of Microsoft and Yahoo now well on track – the challenge is going to be there. Yahoo searches are already employing Bing engine courtesy Microsoft.

As a result, its search ads will growingly pass through the Microsoft adCenter platform. The two partners with their strengths combined sure have a better chance than ever to take on the might of Google.

The current search ad market scenario

  • According to estimates by SearchIgnite, a digital marketing research firm, Google’s share of total US ad spending has increased by close to two percentage points. It crossed 80% mark in the third quarter of this year.
  • On the other hand, share of Yahoo has fallen by two points to less than 14% (13.4%, to be precise). Bing has a share of 6.4%. Google – on that measure – is definitely even more dominant than it’s currently in search queries domain.
  • Another estimate by ComScore suggests that Google cornered more than 65% of US searches this August, whereas Yahoo managed 17.4% followed by Microsoft at 11.1%.
  • Going by estimates of the Interactive Advertising Bureau last year roughly $11 billion was spent on search advertising, and that extra market share is worth not less than $1.5 billion.

Analyzing the scenario, a piece in The Wall Street Journal states: “Google’s outsize share reflects several factors. It commands higher cost per clicks than Yahoo and Bing. People click on Google search ads more often than those on the other two. Advertisers also spend more time on their Google campaigns. All of these factors could change. No longer needed to oversee separate campaigns for Bing and Yahoo should mean advertisers devote more time and energy to marketing on the combined business. Also, Yahoo could gain from Microsoft’s advanced technology.”

A positive development for Yahoo

SearchIgnite concluded in a report that consumers employing Bing clicked 2.4% of their time on search ads, in comparison to 1.8% on Yahoo (This was during early July.)  The higher click-through rate of Bing was sustained even after some amount of Yahoo traffic was added through late September since late July. That sure is good news for advertisers employing Yahoo especially as prices only inched upward.

Bing’s costs per click increased by 5.7% (Before the test they were almost the same as Yahoo) through July to September as Yahoo clicks were included. That is a positive thing for the latter: It will get more revenue with more users now clicking through on ads and on a bit higher rates.

Some of the results may undergo a change once the integration is fully done by the end of this month. It already though, looks certain that Microsoft and Yahoo together will now have a much better shot at challenging dominance of Google than they did alone.