Why Bing is Already a Success
Last year I took part in the Microsoft MBA Digital Market Competition. The competition was set up by a few MBA graduates who work at the search division at Microsoft in New York. The competition required the creation of a marketing plan around two of Microsoft’s online products. My team came in second place and it was lots of fun.
The reason I bring this up is because even though this was a Microsoft competition run by a search division (which means they value search heavily in a marketing plan), Microsoft usually made up only 10-15% of the budget allocated towards search marketing in the contestant’s submissions. The large majority of the search marketing budget went to Google even though we were presenting to Microsoft executives. This is understandable. At the time, Microsoft’s search marketing wasn’t considered to be a worthwhile investment of time and resources. Google seemed to just do everything better.
The fact is that public perception plays a large role in how much money Microsoft makes from their search. Companies won’t even bother advertising on Microsoft Search if they think no one is going to click on the ads. It’s just a waste of time and resources that could be put to better use on Google Search ads. This also has a huge effect on what each advertisers pay for keywords on MS Search. Remember that advertisers pay one penny above what the next lowest bid for that keyword is (actually, that’s not entirely true. There is a quality score which comes into play but the cost per keyword plays a large role). So if some advertisers pull out or just don’t bother, the ripple effect is lower rates for keywords for all current MS advertisers.
Bing has solved a lot of these problems. Bing is getting very good reviews and is now seen as a competitor to Google. We all know that Google will continue to dominate the search industry. Microsoft knows that too. But what Bing has done is given Microsoft the public perception that they have a product that is worth using in your search marketing campaign. This means more advertisers, and higher payments for current advertisers. Microsoft may not win the search war, but they don’t have to. They just need it to bring in some solid revenue and I think with Bing, it will.
You make a very good point about how much perception plays a role in search engine ad buys. So I guess the real question is can Microsoft recoup their $100 million ad campaign for bing with the shift in perception.
@Noah Wolfe
Good point. Not sure if that will ever happen but maybe over time. At least they should see a better return from this advertising campaign than the one with Jerry Seinfeld.