Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
Now that Bing and Yahoo have joined forces, it’s time for them to show retailers why they should move marketing dollars from Google.
With its commanding market share ranging from 65% to 70%, Google Inc. for years has monopolized the attention of search marketers. After all, with limited time and lots of pressure to spend search marketing budgets wisely, marketers will focus on the search engine that reaches the most consumers.
“There aren’t enough hours in the day to manage and optimize Google, Yahoo and Bing,” says Jon Hoch, founder and CEO of web-only retailer Power Equipment Direct Inc. “We spend the vast majority of our time managing Google, since it offers the majority of traffic.”
That strategy has driven steady growth at Hoch’s nine e-commerce sites, which are on track to generate more than $30 million in sales this year. But Hoch is willing to try something new, now that Microsoft Corp.’s Bing search engine is becoming the search engine for Yahoo Inc. sites, giving Bing a search market share of nearly 30%.
“Once Yahoo and Bing merge, we plan to overhaul our paid search campaigns and give Bing much more attention,” Hoch says.
Other retailers also say they will take a closer look at the Bing-Yahoo alliance than they did when the two were distant runners-up to Google. “The issue with Bing has always been one of low volume, so it will be interesting to review performance after the Yahoo-Bing merger is complete,” says Steve Tazic, online marketing manager for Abt Inc., a consumer electronics and home appliances retailer that sells on the web at Abt.com.
But getting a look is one thing; moving marketing dollars to Bing’s adCenter paid search program from Google’s AdWords is quite another. For Bing and Yahoo to accomplish that goal, and thus make their alliance pay off, they likely will have to leapfrog Google with better-performing ad formats and improved tools for tracking ad results.
Since July 2009, when Yahoo and Microsoft announced a 10-year deal for Bing to become the search engine for Yahoo sites, the two companies have been engaged in a laborious integration process. Now it’s time for Microsoft to show if it’s got some surprises up its sleeve, says Kevin Lee, CEO of search marketing firm Didit.
“We are excited that the integration in the U.S. will be completed this year to allow Microsoft to get back to innovating and providing advertisers with both new ad formats and new methods of targeting consumers,” Lee says.
Bing began delivering natural search results on Yahoo’s popular family of informational and entertainment sites in the second half of August, and Microsoft says it’s on track to have Microsoft adCenter powering Yahoo paid search ads by the middle of this month. However, the two companies say they will delay the paid-search transition until early next year if unexpected problems arise to threaten its effectiveness during this fall’s holiday shopping season.
If all goes as planned, the transition will enable advertisers “to reach more than 159 million searchers in the U.S. and 15 million in Canada on Yahoo Search, Bing and our partners with one ad buy,” says David Pann, general manager of Microsoft Advertising Search Network.
But Bing-Yahoo’s long-term success in winning over search marketers will depend on more than just increased search volume, experts say. It will also hinge on the effectiveness of new ad formats as well as features that will give marketers the tools they need to produce good returns through search campaigns.
“Microsoft has made some changes to the search user experience and managing keywords, and we hope it will continue to make things easier,” says Jessica Vaicik, senior marketing manager for Power Equipment Direct. For example, she says Microsoft’s new desktop tool for monitoring keyword performance across multiple advertising campaigns and ad groups within campaigns is better than what Bing previously offered, but still not as easy to use as a similar tool from Google.
The Google application lets marketers manage keywords and ad groups from a single screen, while the Microsoft tool requires more steps to click into each campaign and ad group separately to monitor and adjust keywords. “We need to be able to dive into our ad groups to see the performance of each campaign and keyword,” Vaicik says. “But Microsoft hasn’t offered an easy way to migrate from one ad group to another, and we don’t want to have to take an hour to do what we should be able to do in 10 minutes.”
Interactive search ads
Microsoft and Yahoo say they’re working on changes that will make their search offerings more appealing to consumers as well as more useful and more manageable for advertisers.
Blake Irving, Yahoo’s executive vice president and chief product officer, demonstrated last month, for example, how a search on Yahoo for the film Toy Story 3 would enable searchers to immediately purchase a ticket as well as see a movie trailer and share content on Facebook and other social networks. “If I popped on Toy Story 3, I certainly would like to go buy a ticket right when I get that search result,” he said. “This is an example of that.”
Marketers will have to wait until later this fall for more details on such new search results formats. But Didit’s Lee notes that Microsoft’s Bing already offers what could be a precursor to more interactive search ads that refine results and make it easier for shoppers to find and buy what they want.
A search on Bing for flights to Los Angeles, for instance, gives a traveler the option to select a flight based on his preferred travel time. The subsequent search for available flights produces a page where the traveler can choose a flight and purchase a ticket. And a search for a product like a Nikon d90 digital camera shows a search result with a product image and links to multiple social networking sites. The same searches on Google.com don’t offer the same features.