In its second-largest acquisition, Amazon buys the company for $970 million.
Google still brings in the most traffic, but retailers are ready to spend more on Bing.
Google and Bing appear poised to command an even greater share of retail marketing budgets in 2011, with 53% of respondents to the newest Internet Retailer survey saying they are devoting more of their dollars to search engine marketing this year than in 2010.
And while Google easily remains the focus of retailers' search efforts, Bing is making headway, with nearly 41% of respondents to the survey saying they will shift at least some spending from Google to the 2-year-old search engine operated by Microsoft Corp. New technology that makes it easier for marketers to shift their search campaigns to Bing is contributing to that shift, search experts say.
The Internet Retailer survey generated 96 responses, 58% of them from web-only merchants, with the rest from chain retailers, catalogers and consumer brand manufacturers. Nearly 39% of respondents have annual web sales of less than $1 million, with 29% taking in between $1 million and $5 million per year; 11% earn more than $50 million a year from online retail.
The survey covers both the placement of ads on search engine results pages and strategies for moving up in natural search results, or search engine optimization. E-retailers are trying out a variety of strategies to improve both their pay-per-click and SEO results, and those efforts appear to be paying off.
Traffic from both paid and natural search is growing, survey respondents say. Paid search traffic is up over the past year for 33% of respondents, while natural search traffic increased for 47%. Just over a third of respondents say paid search accounts for at least 26% of site traffic. Natural search is even more important, accounting for at least 26% of traffic for 53% of respondents.
Meanwhile, the survey shows that almost half, or 49%, of respondents are increasing their spend on pay-per-click advertising. E-retailers are increasing their spend at a time when search engines are being more selective about placing ads, says search marketing agency Marin Software, which reported the number of search ads seen by web consumers decreased by 3% in the second quarter compared with the same period last year.
"Less ads were served up but more ads were clicked on," says Matt Lawson, Marin's vice president of marketing, noting that total clicks on retailers' paid search ads increased 14% in the second quarter compared with the same period a year ago. That could suggest retailers are becoming more efficient in crafting paid search ads and bidding on relevant terms.
The Internet Retailer survey, meanwhile, shows that most retailer marketers—68%—are paying at least 26 cents per click, on average; about 13% are paying between 26 and 40 cents; 11% between 41 and 50 cents; 18% between 51 and 75 cents; 11% between 76 cents and $1; and 16% more than $1.
Google remains the king of search, and doesn't have to worry about any usurpers anytime soon, survey results suggest. That's because for nearly 65% of respondents, Google brings in at least 71% of search traffic.
Bing can't even come close to challenging that, according to the survey. 56% of respondents say the Microsoft search engine accounts for less than 10% of their search engine traffic. 39% give Bing credit for between 11% and 30% of traffic, with 4% saying Bing accounts for between 31% and 50% of traffic. A single respondent says Bing brings in between 71% and 90% of traffic.
And when it comes to conversion rates, Google crushes the upstart, with 66% of respondents saying Google yields higher conversion rates than Bing.
But that doesn't mean retail marketers should ignore Bing. The return on investment for ads placed with Bing increased 10% year over year during the first quarter, while the ROI for ads placed with Google decreased 12%, according to a report from digital marketing firm Efficient Frontier.
"If you're not looking at Bing, you are leaving money on the table," said Jake Fenske, director of new media for movie retailer Redbox. "You have to understand the mindset of Bing customers—it is more shopping and retail focused than Google."
The differences are apparent in a search for a movie. If a consumer searches for a specific title on Bing, he can click to watch a preview of the film from either Netflix or Hulu, to buy the film from iTunes or Zune, to read review summaries on both the Internet Movie Database and Rotten Tomatoes, as well as to see which of his Facebook friends Liked the film.
According to the Internet Retailer survey, more than two-thirds of respondents are shifting some of their marketing dollars to Bing, though most are moving cautiously. Less than 16% of respondents say they will shift more than 20% of their spending to Bing, and only one lonely respondent says at least half of search spending will be moved to Bing.
"Yes, people are doing more with Bing, and it's the biggest spenders who are doing the most," says Aaron Goldman, chief marketing officer of online marketing firm Kenshoo. He adds that most retail marketers in the United States by now are used to Bing and its features—even if not entirely convinced of its effectiveness—which at least leads to retailers taking the top keywords and keyword phrases they use to advertise on Google and transferring them to Bing.
And, he notes, it is easier to make that transfer with automated keyword software that vendors sell to retailers. Pet supplies retailer Drs. Foster & Smith, for instance, uses such technology to avoid manual coding in spreadsheets when tweaking a paid search campaign originally created for Google but now being fashioned for Bing, says Matt Stelter, the retailer's assistant manager of Internet marketing.