AdGooroo: Search Advertisers Flocking To MSN

Rich Stokes of AdGoorooThere were nearly 20% more advertisers actively running paid search campaigns on Microsoft's Live Search in the third quarter of 2008 than in the second, according to new stats from AdGooroo.

Meanwhile, there was a 3% increase in Google's active advertiser base, and about a 3% drop in active advertisers for Yahoo. The online advertising technology and competitive intelligence firm released its "Search Engine Advertiser Update-Q308," which also showed that all three of the big engines seemed to take economy-related hits in the middle of the quarter.

AdGooroo President Richard Stokes said there were a number of reasons for the influx of advertisers using adCenter (Microsoft's search ad platform) in the third quarter, including one posed by the software giant's own search team. "We had a meeting with them recently, and they said that in the second quarter, they'd spent quite a bit of time purging low-quality advertisers from their system," Stokes said. "And that's why the number of active advertisers had dropped so much then."

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According to AdGooroo's second-quarter data, the number of Live Search advertisers plummeted by nearly 14% alone in April, followed by a 1.5% drop in May and a 5% drop in June. But Stokes said the rebound was also likely driven by improvements Microsoft made to its search algorithm, and the Cashback program. "They focused on getting better keyword matches and more coverage, as well as doing a better job at delivering holistic results, including things like product snapshots. The Cashback program also seemed to help them gain traction."

Microsoft continued to improve the adCenter interface, upgrading editorial, account management and billing features--many of which had been pain points for advertisers--and started promoting its advanced, Excel-based keyword research suite. "We've found that Microsoft's search team is very responsive to advertisers," Stokes said. "And they try to work on the things that frustrate them."

Meanwhile, the fluctuations active advertiser volume across Google and Yahoo were in line with what Stokes said could be expected. "There's always some sort of quarter-to-quarter shift," he said. "What would be unusual is if we saw no changes." Still, Stokes said that Yahoo's search team appeared to be holding tight while they waited for approval to start the paid search deal with Google, and that inertia represented a definite opportunity for Microsoft. "If Yahoo's not moving forward, then it opens the way up for Microsoft to compete," he said. "My impression is that Microsoft is already starting to steal some market share--from Yahoo--not Google."

The study also found that active advertiser counts for all three of the engines were battered in August, a change Stokes attributed directly to the worsening economy. The number of active first-page advertisers on Google dropped by more than 10% in August, and by nearly 5% for Yahoo. Meanwhile, the number of Microsoft's advertisers increased, but only by about 2%--a dramatic shift from the 13% increase in the previous month.

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