Microsoft Tests Paid Search Ad Format

by Laurie Sullivan, Sep 19, 2009, 1:51 PM

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Microsoft will launch a pilot this month to test new paid search ad formats using logos and favicons embedded in listings. The icons expand on the traditional two simple text lines and link. The formats are intended to make ads pop in search results and to encourage advertisers and media buyers to allocate more paid search campaign dollars to Bing.

James Colborn, director at Microsoft Advertising and long-time adCenter veteran, believes the market is ready to experiment with more creative options. These options stray from standard text ads in search. Consumers next year will start to see a richer ad experience in search results, he says.

Microsoft has seen a rise in query share, and a nearly 40% increase in click-through rates, according to Colborn. Still, getting consumers to switch their favorite search engine, such as Google or Bing, has been a challenge. Microsoft executives are the first to admit that more searches on Bing will increase the amount advertisers and media buyers allocate for campaigns on the engine, which morphed from Live Search. "If you had to sit advertisers down and asked them what they wanted from Live Search, many would have said 'more searches,'" Colborn says. "We've seen momentum in consumer activity on Bing, which should ultimately increase ad budgets."

Google Search remained the No. 1 search engine in August -- growing 2.6% to 7.0 billion searches with a 64.6% market share -- but Bing also increased searches from 9.0% in July to 10.7% during the same month, according to Nielsen's monthly search engine rankings.

Colborn says Microsoft has seen a rise in query share, and a nearly 40% increase in click-through rates. And while the new site design aims to help people search on keywords to find information faster, it's not clear if those benefits also help advertisers. The related searches allow advertisers to explore new keywords they may not have thought about in the past.

Cashback, which launched last year, is another program that Microsoft hopes will get consumers to switch to Bing, especially as the holidays approach. Through Cashback, eBay funds rebates to consumers based on what the company spends through adCenter, according to Chris Orton, senior director of advertising at eBay. "We have seen the Cashback program increase click-through rates dramatically, which ultimately leads to much better conversion rates," he says. "Consumers are driven by getting the rebate, which drives the conversion rate on the site."

Anything that helps consumers save a few bucks on purchases in this economy should boost searches and sales on Bing. Didit cofounder Kevin Lee says Microsoft takes the ad dollars paid by advertisers in the program to give consumers cash back.

When asked whether the Cashback program helps Bing take market share from Google, Lee says "no, because consumers really haven't changed their shopping patterns, but in the long run it should."

Didit provides advertisers with tips on how to attract more consumers through programs, such as Cashback, on Bing. Similar to the test beginning this month using new paid search ad formats with logos and favicons, Cashback advertisers are identified with a logo or icon. "The general mission to come up with better search formats will become more important over time," he says. "Microsoft has talked about allowing advertisers to include mini logos -- if not in the general search tab, maybe in specific tabs."

Microsoft wants to make the search experience more "graphically rich." Consumers who search a lot of engines are typically driven by visuals. It may result in some consumers moving over to Bing, Lee says.

Organic search also has a place in improving the search experience on Bing. Microsoft hopes consumers will take advantage of the categories in the left rail to target better on ambiguous concepts -- such as the keyword "Champagne," which consumers are as likely to use when searching for information about the city in France as they are to locate stores locally that sell the bubbly. Precise terms can gain marketers search volume by identifying searchers seeking products or services that businesses offer, and steering them through the marketing tunnel toward a purchase.

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