|Friday, 28 January 2011
Marin Software, the leading paid search
marketing platform provider, and Razorfish, one of
the largest interactive marketing and technology companies in the
world and a division of the Publicis Groupe, today unveiled the
results of an exclusive study conducted to analyze the impact of
the Search Alliance on paid search campaign performance.
Background & Methodology:
- On July 29, 2009, Microsoft and Yahoo! announced the Search
Alliance, a groundbreaking partnership wherein Microsoft would
power search results and sponsored ads for Yahoo! Search. In North
America, the transition to the Search Alliance occurred during
October 2010. Close as it was to the holiday season, advertisers
worried about its potential impact on their business. Beyond the
immediate impact, advertisers also wanted to understand how this
new marketplace would perform relative to Google.
- To gauge the Search Alliance’s impact, Marin evaluated several
key metrics from the Marin Global Search Index, which includes over
800 clients collectively managing more than $1.8 billion in annual
paid search spend.
- The study evaluated the performance of North American
advertisers between August and December 2010. To factor out the
effects of seasonality, key performance indicators were normalized
against industry averages, using Google as the benchmark for the
search industry. We also interviewed leading advertisers to gain
qualitative, industry-specific insights.
- Post transition, the Search Alliance is gaining ground on
Google. Specifically, the Search Alliance increased its share of
paid search impressions by 4% and its share of clicks by 2%, while
Google’s share was reduced by the same percentage.
- The Search Alliance has resulted in improved traffic quality
for advertisers, as evidenced by higher conversion rates. Excluding
the impact of seasonality, conversion rates for the Search Alliance
increased by 12% during the study period.
The following chart shows how two performance indicators,
Conversion Rate and Cost-Per-Action (CPA) trended relative to
- Increased conversion rates and lower costs-per-click delivered
improved return on advertising spend (ROAS) following the
transition. Costs-per-click (CPC) for the Search Alliance ended the
year 20% below industry benchmarks, resulting in significantly
lower cost-per-acquisition for advertisers.
In summary, a lower cost per click and higher average conversion
rates make it an attractive channel for advertisers. Due to reduced
competition, the Search Alliance can currently offer a lower than
average cost per acquisition, resulting in higher return on
advertising investment than other channels. Given the reduced
management overhead, a larger search share and stronger performance
characteristics, the Search Alliance represents both a viable
channel and a compelling new opportunity for the enterprise search
- In addition to benefiting advertisers, the Search Alliance also
has considerable upside potential for both Yahoo! and Microsoft. As
of December 2010, the Search Alliance was delivering 21% of paid
search clicks, but only capturing 18% of the corresponding ad spend
in the North American market. As advertisers migrate to the new
combined platform and the unified marketplace becomes more
efficient, the Search Alliance has the potential to capture an
additional 3% in advertising spend share – amounting to hundreds of
millions in incremental media dollars.
Link to research