Bing’s sting: Ad revenues still bad news
While Bing is making small market share gains, Microsoft isn’t yet reaping the rewards of increased ad revenues. However, one forecast says the firm could take in an extra $400 million thanks to the site.
The latest market share figures come from ComScore, which has Microsoft on 8.4 percent for June (the first month with Bing figures), up from 8 percent in May. That’s pretty close to figures from rival StatCounter which had the figures as 8.23 percent and 7.86 percent respectively.
However, figures for ad revenues aren’t as impressive. Just 5.7 percent of all money spent on search engine advertising in the second quarter of the year wound up in Microsoft’s pockets. That’s pretty much the same level it’s been at for the past few years.
There are a couple of caveats to that statistic. Bing was only available for one month of the quarter, so the next quarterly figures may tell a fairer story. And even if increased Bing traffic does translate into more hits on adverts, it may take some time before advertisers are confident enough in that trend to increase the budget they devote to the site.
But the figures do highlight the fact that simply making a more popular search engine isn’t enough to be financially successful. If Bing gets more visitors but doesn’t steer them towards sponsored links (either through effective page design or by delivering more relevant ads), the increased traffic will wind up costing Microsoft money through increased server demand.
To give an idea of the sums at stake, a JP Morgan study predicts Microsoft’s revenues will be boosted by $400 million next year thanks to Bing. It came to this figure from a survey showing 7.1 percent of people questioned used Microsoft (either MSN or Live) as their main search engine before Bing’s launch, but 9.4 percent now say they’ll use Bing as their main search engine. (Again, that logic does assume that Bing converts visitors to ad clicks at the same rate as its predecessors.)
The JP Morgan survey also reiterated one of the major obstacles to Bing: 63 percent said there was no way of improving their current “search engine”. That gives further fuel to the theory that anyone challenging Google will have to outperform it on branding as much or more than on performance.
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