To begin with, Microsoft adCenter will start providing paid search results to Yahoo! sites in France, Ireland and the U.K.

Ranked second and third most popular search providers in the UK, Yahoo! and Microsoft hope to be able to achieve this in the first trimester of 2012. Advertisers and marketers will accordingly be informed about actions they can take with regards to their adCenter accounts and budgets.

Testing of the paid search results is expected to begin by mid January itself, but will be limited to a small percentage of Yahoo! traffic. Marketers have been advised to closely monitor their campaigns and prepare to increase their budgets, especially if the budget is currently depleted more than 80% daily.

Location targeting capabilities of adCenter are also being improved in order to help advertisers reach a more relevant audience, with new language and location targeting options. This will help European advertisers to reach users in various locations where the same language is spoken. They will also be able to decide which location they wish to target via choices ranging from a bundle of countries to individual cities. They will also be able to apply bid-boosting to focus their spending more effectively.

Testing and adjustments will continue until the second quarter of the year, by which time, Microsoft and Yahoo! are likely to be ready for a full-scale roll out of these services.

In effect, people visiting a website with the intention to buy are more likely to do so from a sponsored link than from an organic link, and thus more conversions are expected from sponsored links.

This pattern may vary to some extent, depending on the type of search being conducted.

For instance, searches related to news, sports or entertainment, which are not very likely to end in a purchase transaction may originate from an organic link.

On the other hand, searchers looking to purchase specific items are more likely to be attracted to a paid links, and a conversion is more likely to occur when a price tag or model name are available. According to Nick Drew, a researcher who works for Microsoft Advertising, this is largely down to the searcher’s frame of mind.

Someone looking to buy a product is likely to be drawn towards selling phrases such as “buy now”, “sale”, “discount” and prices, which are usually found on sponsored links, as again general information that can be found on organic results. Such a person would not find an organic result from a site such as Wikipedia very helpful when buying.

Conversely, someone looking for information will most likely be turned off by the salesy language on sponsored links, and will instead focus on the organic search results.

Both comScore and Nielsen’s research has found that in any given category of searches, a paid link is more likely to end in a purchase than an organic link. Hence, it is of great importance for marketers to promote their brands through sponsored ad listings.

www.searchalliance.com

According to the official press release from Yahoo! and Microsoft, this alliance will enable their business users to connect with a larger audience of potential customers, thus saving them valuable time and money.

Users will now be able to search ad inventory from both the sites simultaneously, by using the Microsoft search engine, Bing, which presently has a combined audience of about 577 million users worldwide.

Advertisers will be able to use Microsoft adCenter to advertise to the combined client base of Yahoo! and Microsoft.

The alliance will obviously help both the companies concerned to improve monetisation for their partners, eventually helping the companies to generate more revenue for themselves.

Though both companies will continue to have different consumer search experiences, Microsoft will manage the technology for both of them through Bing. Yahoo! will support high volume advertisers, SEO and SEM agencies and resellers and their clients. Microsoft on the other hand will support self service advertisers. All ads will go through the Microsoft ad-Center.

This alliance will be implemented across the U.S. Canada, U.K. and France. Elsewhere in Europe, Latin America and Asia, Microsoft is already a partner of Yahoo!

At present, ads will continue to show up on Bing search results, just as before, and advertisers will be informed about the alliance once it actually begins. They aim to be able to implement the new setup before the 2010 holiday season, but may delay it to early 2011 if needed.

Microsoft Live Search had been losing market share in the last quarter of 2008 and first quarter of 2009, but Bing seems to be changing that situation now.

Reports from Efficient Frontier show that ROI received by advertisers has gone up by 43% for Google, and by 24% for Microsoft Bing, but has dropped by 8% for Yahoo!

This is in spite of the fact that the over all expenditure by advertisers on search marketing has gone down by 21% compared to the same time last year.

The amount that advertisers spent on Bing has gone up by only0.1 percentage points compared to last year, but has gone up by 0.7 percentage points when compared to the first quarter of 2009.

In the second quarter of 2009, Bing received 4.5% of ad spend of the clients of Efficient Frontier, while Yahoo! received 20.5% and Google received 75%. At the same time, Bing had 4.1% of the total clicks while Yahoo! had 24.3% and Google had 71.6%

Bing has been doing especially well in the travel and financial services sectors.

The report by Efficient Frontiers also shows that the amount which its medium spenders (between $50,000 to $2,00,000 per month) are spending on SEM has gone up by 5% in Q2 of 2009, compared to the amount spent at the same time last year, but small advertisers (below $50,000 per month) spent only 59% of what they spent last year, and large advertisers (above $2,00,000 per month) spent 78% of what they spent last year. Over all, the budgets have gone down by 21%.

On the other hand, another SEM company reported that large spenders (over $1 million per year) spent 18.77% more than they did last year, while small spenders (below $1 million per year) spent 25.33% less than they did last year.

comScore reports that Microsoft had 8.4% of market share soon after the launch of Bing in June 2009, compared to 8.02% in May 2009. but that figure is still less than the 9.2% which they had in June 2008. This may be the effect of the recession though.

Microsoft adCenter Analytics was designed with the intention of providing website owners with detailed reports of the activity of their users and also to let them track the performance of their advertisements.

While the service has been closed with immediate effect to new customers, it will continue to be available to existing users till the 31st of December 2009. On that date, all hosted services, data collection and technical support will cease. Those who wish to save any historical data have been advised to download reports through the export feature before that date.

The Microsoft adCenter Analytics team claims that the aim of undertaking this project was to fulfil the needs of small and medium size self-service customers, and to evolve a strategy for web analytics. They claim to have achieved this objective. Their blog states, “It enabled us to most confidently determine that we can be of most value to advertisers and publishers by offering a tailored solution that meets more specialized needs.”

The adCenter Analytics blog will now be called ‘Insights and Analysis’ and it will focus on research and best practices helping online marketers navigate better and improve market optimisation.

Strangely, Microsoft has suggested some alternative analytics services that their clients can now turn to, and the list includes Google and Yahoo!

On Internet Explorer

When seen on an Internet Explorer (IE 7+) window, with no toolbars installed, ads now cover 49% of the screen area for Live Search results when seen on a monitor with 800 x 600 resolution, 44% of the results area at 1024 x 768 resolution and 37% of the results area at 1280 x 1024 resolution.

Ads seen on IE 8 with no active toolbars on an 800 x 600 monitor

On Firefox

With just one active toolbar installed, on Firefox the ads now cover 55% of the screen area for Live Search results when seen on a monitor with 800 x 600 resolution, 46% of the results area at 1024 x 768 resolution and 38% of the results area at 1280 x 1024 resolution.

Ads seen on Firefox with one active toolbar on an 800 x 600 monitor

According to Tina Kelleher of Microsoft, these changes have been made taking into consideration the feedback sent to Live Search by adCenter advertisers. This alteration will enable the generation of more clicks for pay per click campaigns being run on adCenter.

A recent report from analytics firm Covario found that global technology firms increased their ad spend on pay per click ads on Microsoft adCenter by 45.7% in the last quarter of 2008, compared to the same period in 2007.

The placement of a fourth mainline ad was introduced by adCenter last September in the U.S.A; and has shown very encouraging results in that market since then.

There is no mention of any consideration for how this change might be received by users and the impact it might have on the perceived quality of Live Search results.

Microsoft adCenter had commissioned Kelton Research to carry out the survey across 400 small businesses, which had fewer than 250 employees.

The study was conducted online, with the help of 38 questions selected for the purpose of judging the mindset and behaviour of such business owners.

Last year a similar study was conducted in U.K. and revealed similar results.

Surprisingly, of the 59% who said they did not use search marketing 90% said that they had never even attempted to do so, though 86% felt that they were missing an opportunity to expand their businesses.

In fact, 73% of these businesspersons went to the extent of saying that they would rather do their own taxes than start a search marketing campaign. This just goes to show how scared people are to try marketing their businesses through paid search, which could actually be beneficial to them.

72% of the people who do use search marketing say that the number of sales inquiries they receive have gone up and 68% report that they have found that paid search marketing has been effective.

Among the major factors which respondents to the survey reported, were fears regarding costs, time involved and complex procedures involved in the process of search marketing.

In order to allay these fears, Microsoft has offered a free search marketing assistance campaign.

Director of adCenter at Microsoft Advertising, Brian Boland says, “Given today’s current economic conditions, small business owners need more effective ways to optimize their marketing dollars. By investing in paid search marketing, small businesses can track online sales, and determine the return on investment for their campaigns, while at the same time boosting traffic and visibility for their websites.”

The Quick Launch program offered by Microsoft adCenter offers free guidance to advertisers with a minimum monthly budget as low as $500. The advertisers will also be given advice on managing their campaigns through classroom-style training programs, and help to build Keywords etc.

Henceforth, mobile display ads will be shown to all Windows Live for mobile users across the U.S. U.K. France and Spain on both Windows Live Hotmail and Windows Live Messenger. The ads will have to follow guidelines set by the Mobile Marketing Association.

According to Chris Ward, Commercial Director of Microsoft Digital Advertising Solutions, the launch of Display Advertising on Windows Live Mobile is an important milestone for their business and demonstrates the progress they have made in the field.

Brian Arbogast, Corporate Vice President of Mobile Services at Microsoft says, “In today’s connected world, the mobile device is emerging as a prime opportunity for advertisers to reach their audience.” Since Europe is estimated to have over 220.5 million mobile users, mobile advertising has become a fast growing field and advertising on Windows Live Mobile platforms will help advertisers to reach target audiences at all times and places.

Paramount Motion Pictures will be among the first in the U.K. to advertise through this means. Mobile advertising on Windows Live is expected to also be available in Germany, Italy and Netherlands shortly.

Microsoft also plans to include Live Search in the mobile advertising mix, but at present, the mobile search advertising facility will be confined to the U.S. on a ‘by-invitation-only’ basis. Microsoft plans to expand the mobile search advertising service later this year.

Google’s mobile search advertising service has been live for more than a year now, giving them sufficient time to establish a solid presence in the mobile search market and gather enough data to provide a far more intelligent service than Microsoft will be able to.

The delays in incorporating technology from ScreenTonic into the Microsoft Advertising service and launching a good mobile ad product are Microsoft’s fault alone, and they are likely to pay a heavy price for it, just as they are in the Internet search market at present.

As a late entrant in field, the first step that Microsoft has to take is lure advertisers. This can be achieved only by showing relevant results which in turn will win users. And this is precisely what they want to do with their new search engine marketing tools.

In the past, they have faced complaints about lack of relevant search results and a lack of traffic. However, now with adExcellence Microsoft wants make its hold on advertiser tools stronger. Following the lines of the Yahoo Ambassador and Google Advertising Professional program, Microsoft intends to provide opportunities and recognise agencies and advertisers proficient with their adCenter platform through adExcellence. The Webmaster Center is going to further this proficiency by aiding organic search optimisers. Though comparisons between Webmaster Center and Google’s Webmaster tools seem inevitable, it should not deter Microsoft.

Microsoft might have low traffic but if they can provide pertinent information then it won’t be long before they start scoring on this front. Microsoft has definitely taken a step in the right direction but one important question remains, when will it launch something new and untried; instead of just playing second fiddle to its competitors in its quest to catch up on search engine marketing?

Microsoft adCenter

Quality based ranking from Microsoft adCenter determines which ads can be displayed in the top 3 positions, directly above the algorithmic search results. The algorithm sets a threshold and only ads that have a quality score above this threshold are shown above the organic results. The system has now been updated to relax the criteria.

Advertisers can now get their ads to appear in the “mainline” above organic results by controlling their maximum CPC and their ad quality. Over time, Microsoft plans to continue to improve the paid search listings on Live Search, specifically focusing on:

• Quality of ads – that the ad copy aligns with offer, landing page and search term
• Quality of advertisers – that the advertiser is offering unique and valuable goods, services or information
• Quality set of overall listings – that the overall result set is unique, extremely relevant, high quality and the best value for the searcher

Yahoo! Search Marketing

Yahoo! is taking traffic quality seriously. In August they launched the traffic quality center, a site aimed at combating click fraud. Yesterday’s update is taking this a step forward by introducing new features in their pay per click advertising platform that allow advertisers to combat click fraudsters:

• Discounts – pricing discounts for low quality traffic from the partner network
• Click protection – a system to track and identify fraudulent click that advertisers should not be billed for (wasn’t one already supposed to be in place??)
• Blocked continents – excludes traffic from outside North America

Microsoft adCenter’s Trademark Policy

Advertisers may still use trademarked terms in their ads when they are the owner of the trademark, an affiliate or reseller of trademarked products or services, or a site that uses the trademarked term in an informational, descriptive, or non-competitive manner.

What’s Changing?

• Infringing use of trademark terms by direct competitors remains a violation of Microsoft adCenter policies.
• However, it will now be the advertiser’s responsibility to obtain permission from the trademark owner to use a trademarked term in their ads.
• It will also be the trademark owner’s responsibility to address ongoing incorrect usage of their trademark term(s) directly with third-party advertisers.
• Microsoft adCenter will no longer intercede to obtain permission for the advertiser wanting to use a trademarked term.

For trademark owners this means that their ads may display next to other ads that contain their trademarked terms, affiliates, resellers, and third parties may show up against queries for their trademarked terms and competitors’ ads may show up in search results against queries for trademarks in certain scenarios, due to broad keyword matching.