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What the Recent Consolidation of Verizon Media Search Ads Under Bing Ads Means for the Stakeholders

Last week Bing Ads announced that search advertising across Bing, Yahoo and AOL will be powered solely by Bing Ads by the end of March. In addition to sunsetting search ads served through Yahoo Gemini, this announcement also marks the beginning of the end of Yahoo serving Google Ads through the Google Search Partner Network.

Let’s take a look at how big this announcement really is in terms of advertising traffic as well as how it stands to impact the major stakeholders moving forward.

Yahoo Gemini Search Traffic Volume Significant Relative to Bing Ads

Based on Merkle advertiser data, Yahoo Gemini accounts for about 1%-2% of all US search ad traffic, which will now move over to Bing Ads.

Additionally, Bing Ads now stands to power those ad units on the Yahoo domain which had been coming from Google. While it’s difficult to quantify exactly how much Google traffic is attributed to Yahoo due to Google shielding the domains of traffic coming from its Search Partner Network, we believe Yahoo probably accounts for about 2%-3% of Google Shopping ad clicks.

With Bing Ads accounting for about 6%-8% of all US search traffic, the transition of this traffic away from Yahoo Gemini and Google Ads stands to meaningfully grows Bing Ads search share, with Bing itself placing the expected click volume growth at around 10%-15% for US advertisers while clarifying that the impact can vary from advertisers to advertiser. With many of our advertisers taking part in Gemini as well as Google Shopping, the impact to Merkle advertisers seems primed to potentially exceed that range.

There are three key categories of stakeholders who stand to be impacted by such an update: the search engines, advertisers, and searchers.

Bing Ads Gets a Boost, Google Ads Loses Out, Yahoo Gemini for Search Goes Away

As mentioned, Bing Ads now gets to serve ads for many search queries which were formerly covered by Yahoo or Google. This should have a meaningful impact on its ad traffic, particularly for Product Ads, which have already been a huge source of growth for Bing over the past couple of years. Again, Google served Shopping Ads for Yahoo, and Bing Product Ads will likely take their place.

Bing and Yahoo Gemini Spend Growth by Format

Of particular benefit to Bing is the mobile traffic Yahoo commands. In Q4 2018, Bing saw just 25% of its paid search clicks come from phones, with that figure at 22% for Gemini and 61% for Google.

However, it’s no guarantee that Bing will automatically monetize these ad placements at an equal or greater rate than Yahoo was before through Gemini and Google ads. Yahoo renegotiated its deal with Bing back in 2015 primarily due to what it perceived as a failure on Bing’s part to fully monetize search traffic. A lot has changed since then, especially with regards to the success of Bing Product Ads, but it might not be as simple as flipping a switch for all ad traffic coming from Gemini and Google to get recouped by Bing immediately.

For Google, it stands to lose one of (if not the) biggest partners in its network, and there aren’t too many other high quality potential partners out there to take its place. However, the search partner network is a small and diminishing part of Google’s search business, and a significant portion of the revenue Google derived from this traffic went to paying Yahoo. In terms of overall impact to the bottom line, this update is likely to be pretty minor for Google.

Google Search Partner Click Share by Ad Format

For Yahoo Gemini, this change reduces the platform’s role in campaign management to only Yahoo native ads, which account for only a small fraction of Gemini spend for most advertisers on the platform. Many brands will now no longer manage any campaigns at all on Gemini.

Advertisers Get Streamlined Campaign Management and Better Tools

For marketers, there are very few if any drawbacks to this update. Gemini long lagged Bing and Google in terms of campaign management capabilities, and it’s been a hassle to manage the relatively small share of search ad traffic coming through Gemini for the past couple of years. Consolidation of this traffic into a bigger platform is for the best.

Again, Bing hasn’t always had Yahoo’s trust in terms of maximizing search ad revenue, and its possible advertisers will see some hiccups in performance as traffic transitions. However, it’s likely that ad results won’t change too much with the update, and Bing is a lot better positioned to serve good ads now than it was in 2015, particularly with its product ads. Taken together with the benefits of managing this traffic through a more mature platform and the time and resources saved through consolidation, advertisers should feel good about how Bing Ads will perform in the new placements.

Advertisers also won’t have to target the Google Search Partner Network to gain access to Yahoo inventory for Shopping ads anymore. While our research has shown that the Search Partner Network is a fairly efficient way to expand Google Shopping reach, many advertisers choose to exclude ads from the partner network due to the lack of controls available for managing this traffic.

Searchers Likely Get as Good if Not Better Ads

The ability for advertisers to place more focus on one platform rather than splitting optimization efforts between two should also make for better, more tailored ads for searchers. At the very least, there shouldn’t be any noticeable declines in ad relevance from a user perspective and the better campaign management tools of Bing should help improve results over time.

Conclusion

Advertisers should be excited to have Bing and Yahoo search ad inventory management under one roof, particularly given the limitations of Yahoo Gemini. Better management capabilities and fewer platforms to worry about is a definite win.

For Bing Ads, powering more search ad traffic is obviously a positive development. In addition to the added revenue, the increased data that Bing will have as a result might help further develop and better its ad serving capabilities.

Yahoo Gemini isn’t dead yet, but this update significantly reduces the amount of ad spend running through it and the number of advertisers that will be on the platform at all.

Google loses a bit of traffic which it was already paying a lot to acquire anyway. Shopping in particular might see a dip in growth, but it’s unlikely the format takes too much of a hit riding the success of a big Q4.

In the big scheme of things, this does nothing to limit Google’s steadily growing dominance in search traffic share. Google accounts for 94% of all US search ad spend and 98% of all phone US search ad spend. Until Bing (or Yahoo, since Bing is now powering its ads) becomes the default engine on more devices and browsers, it will be difficult to make a dent in Google’s lead. Given Bing Ad’s struggles to grow mobile traffic to date, however, this is a good start to accessing more mobile inventory.

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