Since its launch Bing has slowly been growing its market share. However according to figures released last week Bing’s global search market share faltered in September, slipping to 3.39% from 3.52% in August.

The significance of this minor fluctuation is debatable, however given the extensive marketing Microsoft has been doing to promote Bing as a “Google killer” these latest figures have prompted lots of of discussion both on & offline.

Clearly Microsoft is not everyone’s favourite corporation & so not surprisingly there have been gleeful postings by Microsoft detractors about this fall in market share signalling ‘game over’ for Bing.

Ahh, the joy of schadenfreude!

Do they have a point? After all, recent Google challengers Cuil and WolframAlpha both seem to have faded into obscurity. (When, if ever, did you last use either?). Despite promise of new ground breaking search technologies neither has made any real impression on the Google Juggernaut.

Despite this, if any search engine has a chance of challenging Google it has to be Bing.

But in my opinion it won’t be because of Bing developing better search technology than Google (unlikely as that is), or from Microsoft’s deep pocket marketing.

Think of this like a race between trains on the same track. Google is already way ahead down the track running at full steam, whilst Bing is just starting to pull out of the station.

And the only way Bing will ever overtake Google is if Google goes off the rails.

Which is exactly what happened with AltaVista. Ten years ago they were the kings of search and Google was a nobody. But then AltaVista lost their way, turned into a ‘portal’ and started producing crappy search results. Only then did people who habitually had used AltaVista look to alternative search engines. Google was in the right place at the right time, and their ground breaking technology which provided great results did the rest.

A gross simplification, admittedly. However my point is that even with their better mouse trap Google probably wouldn’t have become the top dog in search if AltaVista hadn’t dropped the ball.

Will Google eventually go off the rails & leave the open the door to another search engine? At this point I’d say that whilst possible, it’s unlikely. But if they do, Microsoft is probably the only contender who can last the distance & exploit the opportunity if it arises.

What do you think?

A lot of ad agencies have been resistant to paid search, despite its unquestionable effectiveness when compared to other media. I think there are a number of factors for this:

Commission (or lack of)
Google PPC media charges are non-commission bearing & this would have to be the number one reason most agencies have actively ignored search until now. The view many seemed to have was that every dollar spent on search effectively cost them lost commission they could earn on traditional commission-bearing media. As a result media plans that should have included search didn’t, or at best it was token.

Obviously the advertising world remuneration structure is changing dramatically. Ad agencies are having to adapt & come up with alternative charge models, such as a transparent management fee on top of media charges.

Measurability
Search is highly measurable & some cynics suggest that not all agencies have liked the associated accountability this brings.

Skills Shortage
There’s a shortage of truly skilled search marketing practitioners in NZ, as there is in other markets. Google have done a great job making the AdWords interface relatively easy to use & training agency staff. However running complex search campaigns takes significantly more time & effort than most agencies realise. As a result many struggle to make money from paid search compared to other ‘set & forget’ type media.

Client Ignorance
Until recent times search has been a relatively arcane subject & many clients simply weren’t aware of the benefits of search. This has changed & smart marketing managers are increasingly demanding that media plans from their agencies feature a decent search component.

The good news is that things are gradually changing & increasingly agencies are being compelled to factor search into the media mix. This sea change is clear when you look at the latest IAB figures which show advertisers are shifting spend online & a major part of this is search.

According to IAB, New Zealand television ad revenues were down 13.3% for the first half of 2009 compared to the same period last year. In stark contrast online advertising grew 7%. Online represented 8.3% of all NZ adspend in 2008, and given the current trends, IAB expect it to exceed 10% for the full 2009 year.

One of the key drivers in this growth has been paid search. It’s now the biggest online advertising channel & as at Q2 paid search accounts for 36.3% of all online spend (up 26.14% on the same period last year).

The IAB expects growth in paid search to continue and eventually account for about 50% of online spend, as in other more developed markets like Australia & UK.

Love it or loathe it, advertising agencies really can no longer ignore search. As a result many ad agencies have either been trying to develop skills in-house to manage paid search campaigns (not as easy as it sounds), or have decided the better path is to partner with independent specialist agencies like SureFire Search (shameless plug). An example of this is Ogilvy who use SureFire to provide search marketing services to their clients.

NZ marketers are finally realising the value of search marketing.

Latest figures from the IAB show online advertising spend continues to grow & that paid search is now the biggest online marketing channel in NZ.

Hallelujah!

At last we’re starting to catch up with other markets where 50% or more of online spend is invested in paid search.

There are plenty of good reasons for this level of investment. Here are 3:

1. Traffic from search engines – by definition, people actively interested in finding out more about your company & products – is highly valued by marketers. These visitors are more engaged than other site visitors, viewing more than twice the number of pages per session & spending twice as much time onsite.
2. Search engines are now seen by users as an arbiter as to the sites – and brands – of value. In one study by Yahoo! & Compete, 61% of users responded that they expect brand leaders to consistently appear in the top search engine results.
3. In their annual polling of marketers as to the most effective forms of offline & online advertising, both eMarketer and MarketingSherpa have consistently concluded that, along with email marketing, SEO & Paid Search Marketing are the strongest tactics producing the best Return on Investment (ROI).

In summary, the reason marketers are increasingly investing in search is simple – it works! And very cost effectively compared to other channels.

If you’re not doing it yet, maybe it’s time you gave it serious consideration. Your competitors probably are…

It looks like even the search colossus Google isn’t immune to the impact of the global recession.

Despite earning a staggering $4.2 billion on revenue of $21.8 billion last year Google is now aggressively trimming expenses to protect profits & stop its stock price from falling further.

Since January Google has eliminated outside contractors; curtailed some of the employee perks they’re famous for; & canned services that weren’t paying off, like their foray into radio advertising.

Google’s huge growth in revenues has fueled significant growth in the last couple of years with headcount jumping to almost 21,000 employees, compared to 10,674 at the end of 2006.  But now to further reduce costs Google has  started laying off staff & consolidating some offices.

Google’s announcement last week that it’s laying off 200 sales & marketing staff globally came as a surprise, given this is the part of the business responsible for generating advertising sales which reportedly account for 97% of Google’s revenue.

Disappointing is the fact that this decision has impacted on the Australian & New Zealand operations. Apparently the Melbourne office is being closed & the New Zealand office staff of 8 cut back significantly.

The Google NZ team is a great group of highly committed & talented people who’s efforts have undoubtedly played a key part in the significant growth of search marketing in New Zealand. Search has taken off since Google established a local office & the level of agency support we’ve experienced has been outstanding.

If Yahoo had a similar presence in the NZ market they’d no doubt be getting a far bigger share of the search cake.

According to the latest Hitwise figures Google has 92.52% of the total NZ search volume share whilst Yahoo has just 3.1% & Microsoft even less at 1.14%.

Sure, there’s much more to Google’s dominance than just having great people on the ground, but it’s certainly played a part.

Our best wishes & sincere thanks go to the local Google NZ team. Thanks guys, you’ve been terrific.