Exclusive: Microsoft and Mi9 turned up the heat again on the near monopoly Google has in search in Australia, unveiling its new advertising search platform, Bing Ads, which it hopes will lure agencies and advertisers to allocate a more “equitable share” of ad dollars to Bing and Yahoo’s estimated 10% share of user search queries here.
Bing and Yahoo search have flatlined for years at around 10% of total user search queries in Australia but they have been undercooked in monetising that share because of Google’s outright dominance. It is also partly linked to the added workload needed by media and digital agencies and advertisers to optimise campaigns for another search platform with small numbers.
The head of Adobe Digital Marketing, Steve Knowles, who sold search agency Downstream to the company 12 months ago and remains one of the biggest spenders on the current Yahoo Search platform, said it would prove a hard ask for Bing to lift its share of ad dollars to match user query volumes.
Bing also shares Yahoo’s paid search engine in a global alliance but Yahoo will “sunset” that technology this year in favour of the Bing Ads engine which Microsoft has been investing heavily in over the past three years.
Knowles said it typically required advertisers and agencies more time and resource to optimise search across two platforms and agencies in particular made more margin in “less transparent” parts of the digital sector such as their own trading desks.
“There is bigger money to be made in less transparent agency trading desks,” he said. “Media agencies are finding it hard to make the margins they’re used to. Brand marketers are pretty comfortable with search now. They’re pretty good at understanding how to value search. There is bigger margins to be made in areas that are not understood and search is well understood. The reality is for Mark Britt and Microsoft to go out try and command time and attention in retasking and retraining agency operations from Yahoo to Microsoft and Bing is going to be a hard ask. Lots of those agency operations get better returns on things other than just adding another 5% in search.”
However, Microsoft and Mi9 are plowing resource into the venture here, which will see Bing Ads go live in July. Discussions are underway with Yahoo!7 for it to use the Bing Ads technology but because it is a joint venture in Australia with Seven West Media, Yahoo!7 is not bound by the terms of the global search alliance between Microsoft and Yahoo.
There have been suggestions that Yahoo!7 is negotiating for better terms for the local alliance compared to the global deal although Yahoo!7 would not comment.
Still, Steve Sirich, global general manager of Bing Ads, said in the 20 markets in which Bing Ads has already launched, it has seen improvements in Bing’s “share of wallet” from advertisers versus Google.
In the US, Yahoo! and Bing command 28% of search volumes against Google - nearly three times higher than Australia – and the company has been able to close the gap between search query volumes and search ad revenues.
“Google’s size [in Australia] definitely does present some constraints relative to our ability to get the share of wallet that is equivalent with our current query share,” he said. “It’s a function of a very strong position Google has that many advertisers are going to just primarily optimise for Google. Certainly our selling organization is up against that. So having an opportunity like this to launch a new technology platform for the ad community to reinvest in to optimise their campaigns and accounts certainly helps us.
“Our share of wallet [in the US] has moved up substantially since we began the journey there a few years ago.”
Mi9 chief executive Mark Britt, a vocal critic of Google’s dominance in the Australian market, said an additional 12 people had been hired to run the new Bing Ads platform.
“We think Australians and Australian advertisers deserve more than one search engine and there is a huge set of consumer needs not being met by Google today. We get that in every single conversation with agencies and advertisers.”
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