Microsoft Gains in Search Market as Bing Stays Strong

Bing is still building momentum. The new decision engine from Microsoft is gaining ground on many fronts, including search-engine marketing.

Almost two weeks ago, Efficient Frontier, a marketing firm that places about $750 million in text ads on search engines around the world, reported that Bing saw a more than eight percent lift in paid clicks compared to the week before the launch. While Microsoft's click share remains at less than five percent and continues to lag Yahoo and Google, the company called Bing's gains a positive step.

"If this share lift holds, we can expect advertisers to allocate additional budget to Microsoft over the coming months. Paid-click growth lagging search-query growth could be due to organic listings in Bing delivering stronger relevancy," said Justin Merickel, marketing vice president at Efficient Frontier.

Bing Keeps Expanding

Merickel pointed to Bing features, such as query-specific drill-down categories available on the top left of the results page, as factors that may be allowing consumers to more easily find a relevant result. The question is whether Bing's success is sustainable.

Recent comScore research suggests it is, at least so far. Microsoft sites' average daily penetration among U.S. searchers reached 16.7 percent during the week of June 8-12, up three percentage points from the May 25-29 week before Bing's introduction, comScore reports. The search-engine world is waiting for comScore's June 2009 U.S. Search Engine Rankings because it will be the first to include search activity at Bing, which was launched June 1.

Efficient Frontier isn't waiting for the rankings. The firm was too curious to learn if Bing's click share is gaining, holding or falling back to Microsoft's previous levels. The latest analysis is good news for the software giant: Bing expanded its share of paid clicks for the two weeks after launch. Bing's share of paid clicks is up 13 percent for its second week. And, it represents an incremental five percent lift over the first week.

A Consistent Success Story

The search advertising market is an important and potentially lucrative one for Microsoft, valued at about $12 billion this year. If Microsoft grabs search-ad market shares from Google, Yahoo and others, it could drive tens of millions of dollars in additional revenue, more than offsetting the $80 million to $100 million the company is spending on marketing Bing.

Merickel said one week doesn't make a trend, nor does two weeks. It's possible that new Bing users may just be exploring the engine after the hype of launch. But it's undeniable that the needle moved in a positive direction for Microsoft, he said. Efficient Frontier plans to watch closely to see whether Bing gains additional traction, sustains the lift from launch, or falls back to Microsoft's previous levels.

Greg Sterling, principal analyst at Sterling Market Intelligence, has a similar reaction to the data: "These data are consistent with what we've seen from Hitwise, comScore and others showing initial gains by Bing. The issue is whether the momentum can be sustained over time," he said. "But there's no question that Bing is off to a solid start. This performance has got to have exceeded all of the expectations in Redmond."