Google, Yahoo, Microsoft -- Rethinking Search Ad Effectiveness

(MoneyWatch)  Earlier this month, I had a post on how Microsoft's Bing had an 80 percent uptick in percentage of people clicking on ads. Now there's some additional evidence that something is apparently going on in terms of search ad effectiveness, but what exactly that might be is up for question. What does become clear is that companies might have to consider an additional factor in deciding whether their investment in search advertising actually works.

According to a TechCrunch report, search advertising network Chitika (Who comes up with these names?) found that in June, Microsoft led both Yahoo and Google in percentage of search users who click through on ads. Each source of numbers -- Compete from my piece and Chitika from this latest one -- has its own potential biases. The former looks at the the Internet use of two million consumers who have given permission for detailed analysis and the latter would follow the results of its own ad network, so either could easily fall into the problem of having non-representative samples. That said, there are at least two indications of improved relative click-through strength on the part of Bing.

I did find the explanation by Erick Schonfeld at TechCrunch to be unconvincing:

But a more likely explanation is that Google represents the vast bulk of the traffic, 83 percent to be exact. Bing only represents 8 percent. There is a law of large numbers at work here. The more traffic that comes from any one source (i.e., Google), the lower the clickthrough rate is likely to trend. If the market share was reversed, Bing would undoubtedly have a lower clickthrough rate.

First, he's taking the result of the one ad network without apparent question of whether it is representational. Second, according to the figures he presents, Bing had over two million ad impressions in June, which, although not as large as the nearly 27 million of Google, is still a pretty big number. If it were larger, would the results be diluted? Very possibly. Would the clickthrough be as low a percentage of total ad impressions as Google? No way to tell.

However, the numbers do ask for additional consideration that suggests another answer. If you do a search on both Bing and Google, you'll notice that the new comer has far fewer ads per page, which makes sense. So Google users face a higher number of ads per page. The law of big numbers in play then might be the number of ads facing consumers and the chance that they are going to click through on more than one. That alone could drag down ad responsiveness. In short, ads on Bing may do better because there are fewer of them on any given search result page.

It wouldn't be surprising if an ad's effectiveness had a strong correlation to how high up on the page it appeared, suggesting that companies using search ads as a marketing tool, especially those putting ads onto Google, should consider that position on the page could seriously influence the effectiveness of the investment.

Image via Flickr user n0nick, CC 2.0.