The Yahoo/MSN Search Alliance, which rolled out in the US late last year – and with mixed results – makes it transition to Europe imminently. As advertisers and agencies this side of the Atlantic await its arrival, I’m sceptical it will finally deliver on being a serious Google competitor. Moreover, there are shortcomings when it comes to paid search with the Alliance and what it really offers the advertiser.

The Alliance won’t help close the gap or dependence on Google in the UK. For starters, it will still only account for around 7% of the UK search space, as a combined force. Bing, who made the mistake of launching an expensive marketing campaign in the UK to drive searchers its way when it was still in Beta, failed to persuade the audience its offering was superior to Google’s, thereby losing a valuable chance to sway users its way.

Mixed results in the US with the search alliance

In late 2009, Yahoo and Microsoft announced plans to tie their two search engines together, in an attempt to deliver a more competitive edge and provide a real alternative to Google for internet browsers. Under the deal, Yahoo’s search engine uses Microsoft’s Bing powered results (both natural and sponsored). The two firms share the revenues.

The deal has largely been Microsoft driven, as it seeks to increase its share in the search engine marketing (SEM) space, which in the UK, is around 4% compared to Yahoo’s 3% and Google’s commanding 90%.

Results thus far in the US have been mixed. Some advertisers are reporting increased cost per clicks (CPC’s), reduced click through rates (CTR’s) and fluctuating cost per acquisitions (CPA’s). Others have suggested the Alliance has delivered more favourable results, including an increase in search volumes and sales. However, one thing we need to bear in mind is that Bing and Yahoo already control close to 30% of the SEM space in the US, significantly more than that in the UK.

Doubts around incremental performance 

Agencies this side of the Atlantic are being briefed on what to expect from the Alliance and how to best go about it. A surprise is the fact that it will not allow for optimisation to specific platforms. This means that for paid search, any bid changes, ad copy amends and position preference settings will be applied across both Bing and Yahoo.

The principle seems reasonable – both sites will be powered by Microsoft after all. However, both sites still have the control on how the advertised results will be displayed, meaning that position three in Yahoo, may be displayed totally differently to position three on Bing.

I spend my working day taking the time to understand how ad positioning can affect the performance of a paid search campaign. Discovering that position three might be at the top of the left-hand sponsored results on one search engine, yet top of the right-hand side of the other, with no ability to optimise accordingly, certainly makes me doubt the incremental performance that can be driven through these sites.

Currently, although traffic and conversion numbers are relatively low across Bing and Yahoo, there is the flexibility of optimising them separately to drive the best possible results. Under the new format, this is removed.

Granted, the time saved by using a single platform to optimise both sites will be appreciated. It would, however, be preferable and far more useful to see the results split by site and be able to act accordingly, even if this does take an extra few hours per day.

All could be forgiven if the Alliance does help close the gap and dependence on Google. However, even as a combined force, the Search Alliance will still only account for approximately 7% of the UK search space. It is my view that Microsoft in particular, will struggle to drive more visitors to its Bing site.

Microsoft had one chance in the UK to sway searchers away from Google. It failed by delivering a solution which at the time of promotion was inferior to that of Google. Things may have changed, but trying to convince the user of that AGAIN, will be a struggle.

It would really be great to see the Search Alliance working in the UK such that marketers have a variety of choice and are not as heavily reliant on Google as they currently are. Indeed it would be good for Google to have a credible contender when it comes to its dominance. However, given the initial results from the US and from some of the limitations I have discovered of late, I am more pessimistic than optimistic about any significant shift in search engine user behaviour in the UK at least.