The Microsoft-Yahoo! Search Alliance: impact on the Search Advertising Landscape
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2 The Microsoft-Yahoo! Search Alliance: impact on the Search Advertising Landscape Gilles Rousseau Microsoft, Sr. Dir. EMEA Strategic Alliances 11h10 11h40
3 Today s agenda What is Search Alliance Benefits for advertisers Learnings from the US Implementation
4 What is Search Alliance Benefits for advertisers Learnings from the US Implementation
5 Introducing the Search Alliance 5
6 Yahoo! and Microsoft Search Alliance Powered by Microsoft. Yahoo! sells to premium advertisers, Microsoft to SMB 2. Powered by Microsoft. Owned and enhanced by Yahoo! 3. Powered and owned by Microsoft.
7 Competition Efficiency Customer service Innovation Performance Why join forces? Create a competitive new choice in search Simplify advertisers search advertising Provide a better search experience for our users Faster innovation through scale Improve ROI to advertisers 7
8 We work together and we still compete. All advertisers will use Microsoft Advertising adcenter. Microsoft has licensed some core Yahoo! search technologies. Microsoft will provide algorithmic and paid search results for both companies. Yahoo! will support premium advertisers, agencies, and resellers. Microsoft will support self-service advertisers. Each company will maintain its own display business. Each company independently manages web properties, products, , and instant messaging. Both companies own and innovate their own consumer search experiences. Both companies will maintain and service their own affiliate search partnerships. 8
9 What is Search Alliance Benefits for advertisers Learnings from the US Implementation
10 How the search alliance benefits advertisers Offers a competitive choice in search Offers a competitive choice in search Yahoo! and Microsoft are working together to achieve the scale and innovation necessary to offer a competitive new choice in search Provides better value and efficiency Simplifies search advertising account relationships with one account team Cost-efficient way to connect to a larger, highly converting audience Saves you time and effort with one place to manage campaigns on a global platform Microsoft Advertising adcenter 10
11 Search Alliance Customer Experience Two Segments, One Marketplace Advertiser today with Yahoo! Account Team Microsoft Account Team Yahoo! I.O. Yahoo! Search Marketing Platform Yahoo! Reporting & Analytics Helps deliver better ROI Two Account Teams Microsoft I.O. Microsoft Search Marketing Platform Microsoft Reporting & Analytics
12 The UK audience 5 unique millionsearchers use Yahoo! and Microsoft not Google Reach 23 million unique searchers using Yahoo! and Microsoft sites comscore qsearch (custom), November
13 Worldwide Our searchers are more likely to buy The unique searchers on Yahoo! and Microsoft sites are: Audience buying power index 96% more likely to make purchases online than the average searcher. Worldwide numbers shown. Source: comscore qsearch (custom), November
14 The UK audience Two best converting search engines % of click-throughs leading to secure pages Together Yahoo! Search and Bing audiences are % 6.5% 5.9% 41% more likely 4.8% to convert than the average UK searcher 4.6% 4.1% Average UK Bing Yahoo! Google AOL Search Ask Source: NNR-UK, May-October
15 What is Search Alliance Benefits for advertisers Learnings from the US Implementation
16 North America Marketplace Update We are seeing stabilization of the marketplace. CPC and volume in the combined marketplace are being closely monitored. Pre-transition speculation about significant CPC increases have not borne out. Increases in CPA and ROI seem to have more than compensated for any CPC increases Click volume may not necessarily be equivalent to the combined volume of the two platforms due to some audience overlap We continuously monitor the market and traffic quality, and will work with you to help maximize clicks and optimize ROI. Beginning this quarter, we anticipate a rich pipeline of innovations from Microsoft on a regular basis, helping to incrementally improve the marketplace, including new matching and optimization technologies.
17 Slide 16 SW7 SW8 Louise to adjust for EMEA SL1 Sarah Wulf; 28/01/2011 Kristopher - can you help make this more appealing too? Sarah Wulf; 28/01/2011
18 Our findings indicate that the Search Alliance is clearly and unequivocally becoming a more attractive channel for paid-search marketers. Marin Software Research Cost per click 0,91 $0.84 0,84 0,84 0,82 0,82 0,82 0,81 0,74 0,73 The Search Alliance has resulted in improved traffic quality for advertisers, as evidenced by higher conversion rates. August September October November December Google Yahoo! Microsoft Search Alliance Yahoo!-Bing s CPC consistently outperformed Google since the introduction of the alliance, and ended the year with a 20% advantage. Yahoo!-Bing (adjusted) CPA & Conv Rate evolution Copyright 2010 Marin Software, Inc. All rights reserved. Search Alliance Conversion Rate % Change and CPA % Change relative to competition
19 Slide 17 SW9 SW10 KL(CGI2 While conversion rates and acquisition costs can and do vary across industries, our data strongly suggests that conversion rates on the Search Alliance have become more favorable following the transition. We attribute this to a confluence of factors, including higher quality traffic, better targeting options and a more efficient marketplace. Conversely, Search Alliance CPA s are trending lower than Google mainly due to lower CPCs. Our findings indicate that the Search Alliance is clearly and unequivocally becoming a more attractive channel for paid-search marketers. Sarah Wulf; 28/01/2011 As the above chart illustrates, the Yahoo!-Bing s CTR initially hovered around that of Google, but ended the year 13% less than Google. Conversely, Yahoo!-Bing s CPC consistently outperformed Google since the introduction of the alliance, and ended the year with a 20% advantage. Cost per Click Yahoo!-Bing (adjusted) CTR and CPC with respect to Google Research Brief - Why the Search Alliance is Paying Off for Paid Search Copyright 2010 Marin Software, Inc. All rights reserved. 8 While CTR and CPC are important indicators, we also wanted to assess traffic quality and look at post-click conversions. The following chart shows how two performance indicators, Conversion Rate and Cost-Per-Action (CPA) trended relative to Google. Analyzing the trajectory of these metrics can deliver improved insights into the quality of traffic and the corresponding clicks. Sarah Wulf; 28/01/2011 But CTR is only one part of the story. Search Marketers also care about how much they pay per click. Here, we observed more concrete shifts. Pre-transition, Yahoo!-Bing s CPC was more or less identical to Google. However after the transition, Google s CPC trended significantly higher than Yahoo!-Bing. A valid question here might be around the affect of seasonality on CPC. The following graph summarizes the previous trends and shows how CPC and CTR on Yahoo!-Bing changed with respect to Google. By looking at the analysis in this way, we can more reliably factor out seasonality, and get a clearer picture of underlying changes. Kristopher Lee (Xtreme Consulting Group Inc); 2/02/2011
20 Latest Bing progress in the US The fact that Bing has crossed the 30% mark in the U.S. is significant in and of itself. Looking back through Experian Hitwise s archives underscores the tremendous amount of growth for Bing-powered search. The rate of growth appears to be increasing [ ] Bing.com, which represented just 10% of searches in September 2010, represented 14.32% of searches in March, 2011 Source: 18
21 What the industry is saying It appears that the RPC on the combined Yahoo-Bing search platform is now on a par with Google. Bing is slowly but surely gaining ground on Google, January 14, 2011 The partnership seems to be working, at least in North America, and it bodes well for the push into Europe this year. Marketers should view the Bing-Yahoo integration as a new opportunity Bing-Yahoo Missed Opportunity For Marketers, Search Spend To Rise, January 18, 2011 Bing is slowly but surely gaining ground on Google January 14, 2011 it seems that Microsoft is gradually, dare I say it, getting search right. Bing is slowly but surely gaining ground on Google, January 14, 2011
22 What is Search Alliance Benefits for advertisers Learnings from the US Implementation
23 Roll-out: We Are Building Scale
24 We are building scale...
25 Typical market Transition Timeline Prepare Set up Optimise Customer migration Paid search testing Algo testing & transition Campaign migration Yahoo! Ad Ramp Tuning Billing transition Paid search transition Account Provisioning Connect Yahoo! account with existing AdCenter account or open a new account in Microsoft advertising adcenter. Campaign Staging Choose your transition option and create campaigns in adcenter. Campaigns will be in a paused state, ready for activation. Ad Serving Transition Ad Serving for Yahoo! search queries will transition from the Yahoo! Search Marketing platform to adcenter. * To promote a positive advertiser experience throughout the transition, we may adjust transition timing and dates as needed. 23
26 Where we are today Prepare Set up Optimise Paid search testing Customer migration Algo testing & transition Campaign migration Yahoo! Ad Ramp Tuning Billing transition 24
27 Guidance to advertisers Keep managing and optimizing your Yahoo! and Microsoft accounts until transition is complete. This is the only way to keep receiving valuable traffic from both accounts. Keep using our tools, features, and products to help improve your performance. We re working to determine future feature capabilities, always keeping in mind what s best for you. Visit for the latest news.
28 Thank You! Gilles Rousseau Sr. Director EMEA Strategic Alliances
29 27
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