The Battle for Search Supremacy – Google vs Microsoft – Round 2
A few months back I wrote an article about how Microsoft and Google were about to go head to head in search and detailed Microsoft’s plans to take on Google’s online marketing monopoly using display advertising. A few things have changed since then and it’s time to re-visit the battle.
Since that article, the much-hyped Microsoft-Yahoo! deal has fallen through (most probably for good now) and Yahoo! have signed an $800 million non-exclusive search advertising deal with Google that will see Google ads appearing in Yahoo!’s search results.
This deal basically means that Microsoft is really the only player left who can seriously have a tilt at Google. All the other players are either too small to be a genuine threat or have some vested interest in Google.
Yahoo! is now one of the latter. The problem that Yahoo! has is that by signing this deal, they have effectively conceded the search advertising war to Google, who maintain a massive market share of around 80%.
However, it’s important to note that this is not the first time that Yahoo! have outsourced to Google. Google supplied Yahoo!’s search results from 2000 to 2004 before Yahoo! engineered their own search engine. Microsoft’s MSN search was likewise outsourced for a number of years to LookSmart, Inktomi and AltaVista before they too decided to create their own engine in late 2004.
So while most consumers believe that Yahoo and MSN have been in the search game for years, and are regarded as the two ‘other players’ in the ‘Big 3,’ both have really only been producing their own search results for about four years. And now that Yahoo have gone back to Google for search engine advertising, it raises questions about whether or not even Yahoo! think they can match it with Google’s AdWords program.
Which brings us back to Microsoft as the only player who has not got some interest in Google’s success. There are a couple of signs that suggest Microsoft may be planning an assault on the Google fortress. The first is the breakaway of the MSN search engine to the Live search engine which operates on a cleaner search-oriented feel (much like Google’s) as opposed to the web portal style of MSN and Yahoo!. This move has allowed Microsoft to frame its Live search as a separate entity that is focused on search, something that Google used very early on to gain credibility.
The announcement of Microsoft’s plans to take on the realm of display advertising is another indication that Microsoft is mobilising its forces. Microsoft AdCenter, while currently no match for the AdWords juggernaut, is in a prime position to receive a makeover and move rapidly into the display advertising field.
However, if Microsoft plan to seriously take on Google they need to move quickly as Google’s acquisitions of DoubleClick, and to a lesser extent YouTube, suggest that Google is keen to move in on this new market as well.
So, whilst there is no doubt that Google is by far and away the leader in terms of market share for both search queries and advertising dollars, there are signs emerging that suggest the Microsoft giant is not ready to lose the search war just yet, although they have to be ready for a long battle if they want to pinch the crown.
Round Two – Google Knockout… but is there movement on the canvas?
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Read MoreIs It the End for Yahoo Search Marketing?
With the recent announcement that Yahoo! and Google have agreed to terms over search-based advertising, many in the industry are beginning to wonder if this is the beginning of the end for Yahoo’s Search Marketing program.
The agreement, which still has to be approved by anti-trust authorities, is an $800 Million (US) deal which will see Google’s paid advertisements appear on Yahoo’s search results.
Assuming the deal is approved, and I have the impression that it will as both AOL and Ask.com are on similar arrangements with Google, then this will mean that advertisers who are signed up with the Google AdWords program will be able to get their ads to display on Yahoo’s search pages.
This begs the question, if advertisers are able to sign up to the AdWords program and control the placement of their ads in Google, Yahoo, Ask.com & AOL, why would advertisers then sign up for Yahoo Search Marketing, which is limited to just Yahoo searches?
The answer is simple… they wouldn’t.
When you throw in the fact that Yahoo Search Marketing requires a $30 deposit and pre-pay billing, Google’s AdWords becomes even more of a clear option. To make the contest even more one-sided, Google offer a whole raft of extras to assist you with your campaigns including Google Analytics, WebMaster Tools and the new Google AdPlanner.
Yahoo claim that their Search Marketing program will continue to operate in tandem to Google’s ad placements but how long will Yahoo’s users put up with double the amount of ads? My guess is that Yahoo’s Search Marketing program will simply be phased out over 12 months or so. The other more cynical option is that Yahoo will simply drop its Search Marketing program as soon as the deal is approved, and are only keeping the program running to help get it rubber stamped.
So why did Yahoo! make this deal? Quite simply… money.
Google’s share of online advertising revenue is around 80% (depending on who you believe) but Yahoo’s is only around 5%. Despite Yahoo’s best efforts they have failed miserably at stealing any of Google’s market share. In fact, they are actually losing ground.
This left Yahoo with two options; makeover their own Search Marketing program to be better than Google’s AdWords, or take the AOL and Ask.com path and simply outsource to Google. They chose the latter and one can hardly blame them. This new deal guarantees Yahoo! a stream of online advertising income but tightens Google’s grasp on the search marketing market.
It’s no wonder that this kind of deal has drawn interest from the anti-trust authorities but if it is approved (as I suspect it will) then there is strong evidence that this is the end for Yahoo’s Search Marketing program. Once again it looks as though it’s going to be Google v Microsoft.
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Read MoreGoogle is Search – But Can Anyone Topple the Giant?
Just as coca-cola was “it” in the 1980’s, in the 21st century Google is the king of search. Their command of both search queries (at somewhere around 65%) and search revenue (around 77% – BRW Magazine) is simply staggering and means that when it comes to search, they are conservatively doubling the performance of all their competitors combined. According to Google’s own promotional material, their advertising network alone reaches 80% of the world’s 1.4 billion internet user’s every month.
So the question then becomes, can anyone topple Google? In the late 90’s Yahoo! was the number one, but Google looked at Yahoo’s weaknesses and created a cleaner search engine that supposedly delivered better search results. But can anyone do it again?
Google continue to go from strength to strength, and their reach is unrivalled. Their advertising network includes AOL, Ask.com and now Yahoo and their recent acquisitions of DoubleClick and Youtube have only broadened their market.
With the much-hyped Yahoo! and Microsoft deal falling through, and Yahoo’s subsequent search marketing deal with Google, who is left to take on the giant of search? Let’s go through the main competitors:
Yahoo!
Currently sitting in a distant second in terms of both advertising and search query share, many claim that Yahoo’s search algorithm is actually superior to Google’s. Whether this is true or not is irrelevant, as the vast majority of users have spoken with their clicks and head to Google for its clean feel. The big thing that Google has over Yahoo is the way Google is able to separate out each of its products to keep that clean feel. Yahoo pack everything they offer into one homepage, which can make it hard to identify what their primary focus is. As a result, many users wonder whether Yahoo’s search is being given the focus it deserves. Yahoo will certainly remain profitable, as they have a loyal fan base that swear by it, but I just can’t see them storming the Google fortress, particularly now they are relying on their ad network.
MSN/Live
If Yahoo is a distant second, then Microsoft’s Live Search is back an eternity in third place. Again, however, there are those out there who believe Microsoft’s search to be better, but I am a definite sceptic on this one. For Microsoft to really succeed in search they need a massive overhaul, and massive overhauls are not really Microsoft’s style. More than likely Microsoft will just let Live run its course, as it doesn’t really seem to have the desire to be number one in search, or else it probably would have put more emphasis on it’s deal with Yahoo rather than letting it slip by the wayside.
AOL, Ask, etc
The old players in the market. Most of these engines still get a decent run of traffic, but most are also relying on Google advertising deals to keep them profitable. These guys are not real challengers for the crown.
Mahalo
Mahalo is an interesting one. Mahalo is Hawaiian for thank you, and the premise behind this start-up is that it is the web’s only human-powered search engine. That is, its search results are not driven by algorithm’s but by human generated results pages. To me it seems like Wikipedia and Dogpile rolled into one, as the user is able to search all the various other engines if Mahalo does not have a page created. I don’t think the concept of a human-powered search engine can work, particularly when it comes to updating it constantly at the speed of web. Wikipedia works but I don’t see Mahalo taking off. It is useful however, if you want to search all the major search engines (and Wikipedia, Youtube, Flickr) all in one go. Other than that I don’t see it ever matching Google. Google’s algorithm’s refresh daily, which is almost impossible for a human-powered search engine to match.
Clusty
Another meta approach to search. Just like Dogpile, Clusty attempts to rank results by aggregating results from other search engines. Once generated however, Clusty clusters results together into categories of results. This is a useful tool but won’t have Google shaking.
Other Small Start-ups
Quintura, Blinkx, Powerset, Kosmix, the list goes on. All these players however, are only targeting tiny market niches, market niches that Google could quite easily swat away with one extra feature to their own search results. The other problem most of these smaller players have is they lack the resources to operate their own search algorithm’s and many of the newcomers rely on refining a Google search.
The Verdict
Here’s the problem as I see it for the other players attempting to usurp Google; all of them either rely on Google’s search is some way or are targeting niche markets that Google could themselves cover by throwing a few million at a new Google product.
Google have already done this with email. Google took a search-based approach to internet-based email and eroded Microsoft’s Hotmail monopoly in a flash, so these small niche players had better watch their back. If Microsoft can be beaten so easily, where does that leave the little guy?
But all the big players (including Yahoo thanks to this new deal) are relying on Google in some way either for search results or search advertising. All, that is, except Microsoft. Microsoft’s Live is the one major search engine out there not dependent on Google’s algorithms or advertising dollars.
Over the last few years Google has continually stripped away Microsoft’s stranglehold on all things digital, and maybe the time is right for the old dog to get angry and strike back.
Alas, however, it doesn’t look like that’s going to happen…
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Read MoreSEM Tip – Don’t Get Hung Up on Click-Through-Rates
SEM Tip #1
When it comes to managing a search engine marketing (SEM) campaign online in Google AdWords or one of the other search marketing programs, too many businesses get carried away with click-through-rates (CTR).
But before I get into why click-through rates (CTR) are overrated, let’s just clarify what a CTR is. A Click-Through-Rate, or CTR, is a measure of the percentage of people who click on your ad after viewing it.
Typical CTR’s are often well below 1% for most online campaigns, but what is it about them that as soon as they reach 2-3% everyone starts giving each other high-fives even when sales are not affected? So let’s go through the pros and cons of CTRs.
Firstly, CTR’s can be used as a guide to how effective your ad text is. Quite often, the more appealing your ad text is, the higher your CTR will be. But what if you’re in a very specific industry, say ‘neon lighting Brisbane.’ As part of your campaign it would be perfectly normal to include broader keywords such a ‘Brisbane lighting’ in the hope that people who search for lighting in Brisbane will be then interested in neon lighting. However, this is where your CTR can be misleading.
For instance, say my headline for the ad is ‘Brisbane Lighting’ – A large majority of users who have searched “Brisbane lighting” might think this is a relevant ad, so I get a higher CTR. The problem is that they click on the ad, bumping up my CTR and costing me money, only to find when they get to the site that I only sell neon lights. This is a waste…but my CTR looks good right?
On the other side of the coin, if my headline for the ad is ‘Brisbane Neon Lighting,’ all those users who have searched for “Brisbane lighting” will see my ad but only those who are interested in neon lighting will click on it. This means that I get a lower CTR but in this case that’s actually a good thing as I get better quality traffic.
Now, it is well publicised that Google, when ranking ads, don’t just take into account how much you bid, but also your quality score. One of the things that makes up the quality score is your CTR. However, your quality score is unique to each separate keyword, so having a low CTR on a broad term such as ‘Brisbane lighting’ does not affect your quality score on your more targeted keywords such as ‘Brisbane neon lighting,’ so there’s no real advantage to CTR there.
The other downside of having a high CTR is that you use up your advertising budget very quickly. A low CTR has the added advantage of giving you great exposure, as you get more impressions on your ads before your budget is used up. This helps immensely with brand recognition.
So at the end of all this you may be wondering if I can’t trust CTR, what can I trust? Some people put their faith in conversion rates, but this again has many of the same pitfalls. The best statistic to track is cost-per-conversion, which details how much it costs per sale or lead. This is done by the insertion of a snippet of HTML code on your ‘Thankyou for Purchasing’ (or likewise) page. A professional SEM management company can set your business up a conversion tracking AdWords account and manage it throughout the course of a campaign, continually adjusting all facets of the campaign for best performance.
I guess the key thing to take from this today is that when it comes to your online marketing campaigns, don’t worry too much about the percentages; but look at the dollar amounts that it is costing your business per sale to advertise online.
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Read MoreSpend on Search – The Budget Alternative
With macroeconomic conditions in Australia meaning that many businesses are tightening their belts, the most common area that spending is being cut from is marketing.
This is evident by the fact that marketing positions are down by 26% across Australia (BRW Magazine) as many businesses look to cut the fat from their advertising dollars.
But there is a cheap alternative to traditional advertising mediums… search.
There are two kinds of ways businesses can spend money on search. One is through search engine optimisation (SEO) where professional optimisers improve your website’s position in search engine rankings. The other is search engine marketing (SEM) which are the paid ads you will see above and to the right of natural search results.
There are a number of reasons why search engine spending is a wise alternative. Let’s do a quick comparison:
A full page ad in many print media publications costs between $6000-10,000 for just one run. And this is occuring at a time when many businesses are noting a distinct drop in conversion to sales from print media.
One of the clients I manage has a Google AdWords budget of $90 per day. One of the great things about investing in SEM is the ease with which detailed statistics can be obtained and sales conversions tracked. Here are the basic facts from four weeks of the AdWords campaign:
- Around $2500 was pumped through AdWords in that time. This compares quite well to the $6000 that would have been splurged on a print media ad.
- The Ads generated about 180,000 impressions. That means 180,000 people actually had the ad appear on their screens. Even if the readership of the print publication was 200,000, this does not mean that 200,000 people saw the ad, especially if the ad is buried on page 37.
- As a result of these impressions, over 1200 visitors were sent directly to the site.
- This translated into 350 conversions at an average cost per conversion of around $6.50. With the print media ads, it is often very difficult, if not impossible, to tell exactly how many sales have been generated.
So when we sit back now and look at the final figures, this particular client spent half as much money and generated around the same number, if not more, views of the ad. But the thing is, they know exactly how much they spent, how many views they had, and most importantly, how much it cost them per sale to undertake the advertising.
It is this combination of factors that makes search such an attractive alternative to traditional marketing.
But SEM is just half of the picture, as that $6000-10000 can also buy your company a whole lot of SEO. By putting that money into professional SEO you’ll get around 12 months of continual optimisation for Google and the other major search engines.
This means 12 months, not one print run, of potential customers seeing your site up the top of search engine results, and that translates into sales.
So despite many business’ financials being quite tight around Australia at the moment, SEO and SEM remain highly lucrative options as their relatively cheap nature and ease of tracking make them a smart solution for all businesses.
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