Microsoft’s rebranding of their search product as “Bing” and heavy marketing spending in support of its relaunch has led to significant attention being garnered for their latest assault on Google’s near hegemony in search. Comscore is reporting that Microsoft’s share of search engine results pages (SERPs) in the U.S., increased from 9.1% to 11.1%. Assuming the increased usage of Bing lasts longer than searchers’ brief flirtations with Cuil and Wolfram Alpha, this should lead PPC advertisers not currently utilizing MSN to question whether they should add Bing to their campaigns.
The dominant share of the search market controlled by Google has led numerous PPC advertisers with small or medium sized programs to focus their efforts exclusively on Google’s Adwords. Given that the soft costs of actively managing a PPC advertising program can easily exceed 20% of the spending on clicks and that Google’s controls a ~70% share of search, a PPC program primarily focused on Google is appropriate for many advertisers. It is much easier to manage a campaign focused on a single search engine and often more cost effective.
There are three key factors that will determine if reallocating spending from Google to Bing makes economic sense:
- Are clicks and conversions on Bing less expensive than on Google, and if so, by how large a percentage?
- What are the soft costs of adding the management of a campaign on Bing to the PPC program?
- What is the PPC advertising budget?
For a look at the economics of reallocating PPC spending from Google to Bing, we’ll assume that a theoretical advertiser is spending $200,000 for clicks and has with an additional 15-20% in soft costs in managing the campaign. It will also be assumed that due to the lesser level of competition on Bing, that the cost per conversion is 20% lower than on Google.
If 15% of spending on clicks is reallocated to Bing, this results in $30,000 in spending on Bing clicks (Bing’s 11% share divided by Google ~70% rounds to approximately 15%). Assuming the $30,000 in spending that has been reallocated to Bing spending is 20% more efficient, the revised campaign is about $6,000 more efficient. Thus, if the incremental soft cost of managing the new campaign on Bing are less than $6,000, then it is likely appropriate to begin PPC advertising on Bing. The percentage of spend on managing a Bing campaign is likely to be higher than for Google, but because so much of the learning from managing a Google Adwords campaign can be directly transferred to the incremental program, the absolute costs will be significantly lower.
The above example is obviously simplistic. It has been blithely assumed that the difference in cost of conversions on Bing versus Google is 20% less. However, this key metric varies tremendously by category, so the 20% result being used in this example should not be relied upon. Bing is likely to be particularly efficient in less competitive categories with fewer PPC advertisers. Further, share of search and conversion rates also vary by category. Thus, for some categories, Bing may offer only minimal efficiencies, if any at all. Other factors will also come into play, including how viewers interact with the Bing and Google search engine results pages.
A preliminary eye tracking study we conducted at User Centric indicated that sponsored links on the right attracted more attention on Bing (~42% of participants per search) than they did on Google (~25% of participants per search). The participants who fixated on these links spent approximately 2.5 seconds looking at the area during transactional searches and 2 seconds during informational searches. These times were similar for the two search engines. As part of this independent, non-sponsored study, User Centric used eye tracking technology to capture 21 participants’ eye movements as they completed two informational (e.g., “Learn about eating healthy”) and two transactional (e.g., “Book a last minute vacation”) search tasks in each engine. Additional research is planned to determine if this result holds up after users become familiar with the Bing interface.
In conclusion, PPC advertisers that are not currently utilizing Bing may want to give Microsoft’s new search product a trial. In many cases, it may be appropriate to begin with a small scale test to determine the economics of a Bing PPC program specific to the advertiser. It may be discovered that the benefits from advertising on Bing makes the juice well worth the effort of the squeeze.
