Agencies Prep for Yahoo-Bing Transition

After being live for a year and backed by an estimated $100 million ad push, Microsoft’s Bing now commands about 12 percent or 13 percent of the search market, up from 8 percent or 9 percent a year ago, depending on the source. Yet category behemoth Google still commands about 65 percent of the market.

So is Bing a boom, a bust or something in between? Search buyers credit Microsoft for making steady, albeit slow progress. “If I’m [Microsoft CEO] Steve Ballmer, I’m looking at Bing’s share and saying, ‘Hey, it’s been a really good year,’” said David Karnstedt, president/CEO of the search agency Efficient Frontier.

“I think 15 percent share would have been a home run,” added Chris Copeland, CEO of GroupM Search. “Twelve percent a year is a solid double for me.”

Key for Microsoft, argues Karnstedt, are monetizable clicks, which translate to revenue. Per Efficient Frontier’s own client research, Bing has enjoyed a 36 percent increase in click share and a 56 percent increase in spend share from Q2 ’09.

One caveat to Bing’s growth is that it appears to have come more at the expense of soon-to-be partner Yahoo rather than rival Google. “Rarely do you see both Bing and Yahoo grow during the same month,” said Daina Middleton, CEO of the search agency Performics.
Bing director Adam Sohn pointed to consumer research, which found Bing to have 60 percent unaided brand awareness as a major sign of success. “Nobody wants to be in third place, but we are pretty happy,” he said. “You haven’t seen share growth [like this] in years.”

Buyers expect Bing’s ad business will improve once the Yahoo integration is complete. “Almost all of our advertisers use Bing, but clients have only so much time to spend optimizing their search campaigns, and right now they spend that time with Google,” said Roger Barnette, CEO of SearchIgnite. “The Yahoo integration is going to change that.”

Yet just when that integration happens is still up in the air. While Microsoft began handling all of Yahoo’s organic search queries a few weeks ago, it has yet to take over its paid search ads. Regardless of when that happens, search agencies are bracing for a rocky transition. “We expect a couple of weeks of big volatility,” said Copeland.

But as anxious as agencies are to move forward, nobody wants Microsoft to rush the integration. Karnstedt said his team is meeting weekly to prep for both scenarios, given the importance of Q4. “You can’t be the search engine that killed Santa Claus,” Copeland added.
Equally as important to search buyers is that Bing continues to innovate, an effort which some argue has stalled. Per Aaron Goldman, principal at the digital marketing firm Connectual, Bing is now Google’s equal in usability. “But just as good is not going to win,” he said.

Sohn promises that several innovative features are coming this fall, likely in the areas of visual search, mapping and mobile. And while distribution will be a focus (Microsoft is expected to aggressively court AOL), the race is really about creating consistent primary users, said Sohn.
“We need to build a loyalist base,” he added. “And the product is the biggest part of doing that.”