Did MSN Get Bling from Bing?

by Craig Macdonald | July 9, 2009

MSN launched Bing officially on June 3, 2009. So with a month of performance information under our belts – is Bing making a difference? We investigated two issues:

Have the key metrics of search platform effectiveness – Click Through Rate, Cost Per Click, and Conversion Rate – improved on the new platform?
Are advertisers spending more of their budget on Bing than on MSN such that the fundamental allocation of paid search spend is changing?

To answer these questions, we looked at the performance of our high tech customers during the one month before the launch of Bing, and compared key metrics to the performance during the month after the launch. Here is what we found

Using the pre-launch period as an index benchmark – spending actually DECREASED on Bing during the post-launch month. There is nuance to that statement. We saw a significant increase in spending by high tech customers during the 2-3 weeks after the launch, but was cut back in the 4th week.
Why? The Cost per Acquisition and Cost per Click both spiked on the network – by 38% and 29% respectively.
Our hypothesis is that advertisers did experiments, in North America only, by increasing spend on the network. This drove up prices of the CPCs on the auction (more competition), but without the corresponding increase in qualified search traffic (or inventory) which drove up CPA.

bing-graph

With relatively expensive CPAs sustaining themselves, even 3 weeks after launch, the experiments are ending and advertisers are pulling back on the spending until the inventory of buyers on the network increases – if it increases.

Comscore had reported that they are seeing spikes in traffic to Bing post-launch. That may be. CTRs increased by 28% during the post launch period. However, this is not translating into conversions – yet.

Actionable Insights. Our conclusions at this time are that the advertising that Microsoft is putting behind driving additional consumers to the site are not driving qualified search traffic – at least to the high tech space. As a result, there will not be a significant structural change in the way organizations allocate their paid search budgets – the allocation will remain 80% Google, 12% Yahoo, 5% on Bing, and the remainder on ancillary search engines.