Microsoft Sees Bing Ad Revenue Inch Upward

Microsoft announced Wednesday that revenue from its search advertising, excluding traffic acquisition costs, rose 14% in the fourth quarter of 2018.

Revenue from LinkedIn rose 29%. The company cited record levels of engagement highlighted by the time people spend on the site, which rose about nearly 30% in the quarter, compared with the year-ago.

Azure, Microsoft’s cloud services, experienced the most growth at 76%. Overall, revenue rose 12% to $32.5 billion.

Pointing to the search advertising deal between Microsoft and Verizon Media Group, the analytics arm at the agency Merkle said in its quarterly report that ”the future looks brighter for Bing.”

One reason, per the report, is that Yahoo -- which has shown Google Shopping ads since early 2016 -- will now exclusively begin to rely on Bing for its search ads.

While search ad spending across Bing Ads and Yahoo Gemini fell 7% year-over-year (YoY) in the fourth quarter of 2018, Bing traffic should benefit this year as Verizon's Yahoo stops using Yahoo Gemini and Google Shopping and begins sourcing all of its search ad traffic from Bing Ads.



For retailers, Bing Product Ads produced 63% of non-brand search ad clicks for the Bing Ads platform in the quarter, according to Merkle -- up from 47% a year earlier.

Including brand ads, Product Ads generated 31% of all Bing search ad clicks, up from 27% a year earlier.

Overall, Microsoft had a pretty good fourth quarter in terms of advertising revenue, even as some retailers like Bed Bath & Beyond spent less on search advertising and sent fewer emails to customers during the quarter to cut expenses, compared with the year prior.

More consumer products goods companies are moving toward marketing rather than paid advertising. For example, Scotts Miracle-Gro -- faced with consumers who want more organic-type ways to grow fruits and vegetables as well as keep their gardens pest free -- had to head “down the new path” supported by marketing.  

“Both of our new products, Performance Organics and GroundClear will be supported by a more contemporary campaign that blends consumer lifestyle and product performance messages,” said Jim Hagedorn, chairman and CEO of Scotts Miracle-Gro, in the company’s latest earnings call.

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