Microsoft is still chasing Google in search ads. Facebook may be its own rocket.
A report on search advertising in the first quarter of 2011 by Efficient Frontier, an online advertising analysis and consulting firm, shows that Google is still overwhelmingly dominant in the amount of money it gets from search advertisers. Microsoft's Bing, which has absorbed much of Yahoo's search business, appears to have suffered some customer leakage, but may be winning them back in important categories.
Efficient Frontier also tracked a sharp increase in activity and spending on ads in Facebook, which it counts as a category separate from either search or display advertising. The company didn't break the Facebook numbers out with much granularity "there was 40% cost per click growth in Marketplace ads (those are the ones that appear on the right hand side, and seem to sometimes know about you " they are bid at in auction, like search ads.) EF also said there was a 300% increase in ad inventory.
Given the relative newness of aggressive Facebook advertising, and the lack of any base numbers, however, it is hard to tell how significant the growth is. In another recent report, EF said advertisers get 37% more impressions on Facebook for 6% of their Google budgets. Facebook ads tend to lack Google's call to action, however, so the results aren't as good " at least initially. EF and others have found that a mix of outlets is necessary to create both initial sales and lasting relevance.
For the quarter, Google gained slightly, with 79.1% of all paid search marketing spend, versus 20.9% for Bing (Note: Other search engines like Blekko and Ask also get paid, but their shars are so tiny that putting them in might actually distort the comparative results, EF says.) That was up from 78.7% and 21.3%, respectively, in the fourth quarter of 2010. Compared with a year ago, Google killed it: Back then it had 74.2% of the paid search market, compared with 7% for Microsoft and 18.8% for Yahoo, the paid search of which has since disappeared into Microsoft.
No expert here, but that nearly five percentage point move came from marketers leaving Yahoo for Google over Bing. Microsoft surely has to win them back. The report shows that Bing had a better ROI than Google, up 10% compared with a year ago, while Google was down 12% from a year ago. Bing also increased the number of ads that were clicked on, reversing a yearlong trend that had benefited Google.
Impressions are back to year-ago levels, and have fallen at Google, so Bing may already be coming back. In particular, Bing did well in finance and retail, but lost market share in travel. Last week's U.S. government decision allowing Google to purchase air travel information business ITA Software could make it even harder for Bing to compete in travel. Google also picked up slightly in the automotive category. Of the four categories, however, Bing is picking up in the two that improved the most, in terms of spending.
Outside the US, Google remained dominant, with an unchanged 91% share of spend in the UK, and even higher in France, Germany, and Australia. Only in Japan, where Yahoo remains an important player, was there any real competition, 52.8% of spend for Google against 47.2% for Yahoo. Search ad spending was still increasing in Japan, despite the effect of the earthquake and tsunami late in the first quarter.
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