Yahoo Microsoft Search Alliance Good or Bad for Search Marketing?

Earlier this week, Microsoft shared some numbers from the Microsoft-Yahoo Search Alliance (search and advertising deal), which saw Bing powering the back-end of Yahoo Search, and the merger of Yahoo Search Marketing and Microsoft adCenter.

“The data showed that from August 2010 to December 2010 Search Market Query Share for Bing rose 7.25%,” wrote Microsoft’s Paul Greenwood. “During this same period Google gained .61%. Impressions for adCenter advertisers was up 4%, clicks up 2%, and costs roughly flat. CPC was consistently below Google.”

Microsoft has now posted the following bullet points from a Search Engine Strategies NY session led by Dr. Niraj Shah on the Microsoft Advertising Blog:

Stats of Paid Search Performance Relative to Google

– CTR was roughly equivalent to Google but declined from November
– CPC was consistency below Google; trending downward trend post-transition

Stats Search Conversion Rate and CPA

– Conversion rates dipped during transition but ended 2010 13% higher
– Cost per action (CPA) increased during transition but finished 17% lower

How do we wrap this up? Where do advertisers go with this information?

– Early movers can gain an edge.
– Instead of now having to manage across three engines you can narrow down. – Saving time and becoming more efficient.
– Favorable CPC’s and cheaper clicks and conversions.
– Improved reach and volume drivers greater consistency and manageability
– Favorable CPC and conversion environment (for now)
– Strong performance characteristics imply a higher ROAS than before

Best practices for search alliance success

– Identify coverage gaps between Microsoft Advertising adCenter and Adwords
– Pay attention to geo-targeting and match type settings when transitioning campaigns
– Bid adCenter keywords at the Match-type Level
– Adjust budgets to account for increased volumes
– Set alerts to identify and expand high performing terms

Bing Director Stefan Weitz said, “Because we’re actually powering Yahoo, and not necessarily being Yahoo, Yahoo has the ability (and are doing a great job) innovating on the front-end user experience. So they take our great core results, and on top they can apply their secret sauce…For consumers, what it gives them, is two really different experiences, and depending on which one you like for a particular query, you get to have those experiences. It’s great for consumers.”

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