“We’re all in on search” was the message from Rik van der Kooi, Microsoft’s Corporate VP of advertiser and publisher solutions, at Bing Ads Next, a day of briefings for roughly 60 advertisers held earlier this month in Kirkland, WA.
It’s been a year of transition for Microsoft’s ad businesses: a new agreement with Yahoo eliminated Microsoft’s exclusive hold on Yahoo search inventory on desktop, but it also freed Microsoft to be the exclusive sales force for Bing Ads. Microsoft also handed off display ad sales to AOL and Appnexus.
“Some doubted our commitment,” said van der Kooi. “We’ve built a business that’s on the path to success. We’re all in.”
That tone of confidence set by van der Kooi is a sharp change from the almost apologetic tone expressed by executives at this event just two years ago. Many of the conversations then focused on the “punch list” of features still needed to reach parity with Google AdWords and pleas for greater reach and scale from advertisers. The big product release announced at that year’s event was the Hero Ad, a branded banner-like ad that appeared in Smart Search results on Windows 8.1. Almost nobody in attendance had seen, much less used, Windows 8.1. The Hero Ad test was short-lived.
Just two years later, Bing integrations into Microsoft products, syndication partnerships, faster engineering cycles and a new sales focus have helped change the conversation.
Rather than apologize for what might be perceived as underwhelming market share compared to Google, Kooi touted the fact that Bing has grown from seven percent of the US search market six years ago to a 21-percent share today – and up to a third of the market, if you include syndication.
“A year ago we didn’t have a significant syndication business. We’re seeing 20 percent growth year-over-year,” said David Pann GM of search advertising. Ad clicks from syndication partners have increased four to five times in the past year. Partners include Forbes, the Wall Street Journal and Bloomberg.
Then there is Windows 10, which puts Bing and Cortana in the task bar. When Windows 10 launched in July, Pann predicted Bing would see a 10- to 15-percent lift in search volume by September. Microsoft announced in October that Bing had contributed roughly $1 billion in revenue for the quarter, finally becoming profitable. CEO Satya Nadella also mentioned that Windows 10 users had already asked Cortana more than a billion questions.
Circumventing the browser is becoming part of the growth model: “Four out of five queries go to Google in the browser,” said Kooi, “In the task bar five out of five queries go to Bing.”
In discussing plans for growth on mobile, where Bing is weaker than both Google and Yahoo, Kooi said they are taking a three-pronged approach:
“There is no silver bullet for us. We were small on the PC as well once, too,” concluded Kooi.
The pace of feature tests and releases has picked up significantly in the past year. Paul Apodaca, principal PM manager, discussed some of the recent feature updates, including automated rules, multi-account bulk spreadsheet management (in beta now), the ability to include new and refurbished items in Shopping campaigns and a flurry of ad extensions, such as the image extensions that went live this past week.
“It used to be that every test had to get pushed through the entire system,” said Apodaca. Now engineering has adopted a more agile workflow.
On the updated Universal Event Tracking product, Apodaca says remarketing, which went live globally in mid-October, “is just the tip of the iceberg.”
The big product announcement was that Bing Ads Editor for Mac is finally on its way. This has been the top feature request for several years, and it’s a milestone to finally have engineering resources devoted to it.
On the user experience and consumer engagement side, Ryan Gavin, General Manager at Microsoft for Search, Cloud, and Content, said that the focus is now on people’s passions, such as sports or elections, to bring more users to Bing and drive engagement. Gavin pointed to Bing Predicts and the elections features that debuted ahead of last year’s November elections as products that have become wildly popular.
These differentiated experiences also offer commercial opportunities (football, Nascar, awards shows, elections and more), Gavin added, noting that they often see search volumes in these areas exceeding those of Google.
Cortana is also a big part of the growth strategy. “Speech recognition is going to transform how we search,” said van der Kooi. Noting Microsoft’s work in this area for more than a decade, he said they feel well positioned to take advantage of the move toward more users using voice to search. The Cortana app is now available on iOS and Android in addition to being baked into Windows 10. “If we make it useful, people will want that app wherever they go.”
The idea of search as a small division fighting an uphill (if not losing) battle against Google is gone at Microsoft. “Search is a key component to our monetization strategy,” said Gavin.
With Microsoft taking back search selling for Bing Ads back from Yahoo, Microsoft is now the only company focused solely on selling search in the US and many other markets around the world. The company says it has hired a sales force of about 400 globally.
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