As we are finishing up our analysis for our Q4 2010 online marketing report we have noticed trends in the Yahoo-Bing transition that we would like to share with you.

1.       Marketshare:  Our analysis reveals that lower quality traffic was culled during the transition and as a result the impression volume dropped significantly.  However, this has had negligible impact on click share which decreased by 2.5% and on spend share where do not see any tangible impact.

2.       Revenue per Click (RPC): As traffic quality improved, RPCs rose throughout the Yahoo-Bing transition. At the start of the transition RPCs on the combined platform were 20% worse than Google but by the end of December the RPCs on Google and Yahoo-Bing were identical.



1.       Cost per Click (CPC): Advertisers responded to the higher quality traffic and higher ROI by increasing their bids resulting in higher CPCs on the combined platform. CPCs on the combined platform caught up with Google CPCs by the end of Q4.


Our Outlook

1.       While the Yahoo-Bing transition did result in a small drop in click share and spend share, the loss should be a temporary blip for two reasons. (1) Q4 is strong for retail where Google is over indexed and (2) Smaller advertisers will start allocating greater budgets to Yahoo-Bing as they notice the higher ROI opportunities.

2.       Analysts will be well advised to not use impression share as a bench mark as Bing’s algorithms are stricter about serving ads to higher quality traffic. Click and spend share are better market share benchmarks.

3.       Given that the ROI on Yahoo traffic was 20-25% worse than Google’s and Bing’s ROI was 25% better, the weighted ROI of the combined traffic should have been 5-7% worse than Google. However, it is about the same as Google now. Thus, Bing has done well on this front. However, it remains to be seen if it can expand its click share while keeping its RPCs high.

We look forward to presenting more insights about the transition and other market trends in our upcoming quarterly report.  Stay tuned !

Dr. Siddharth Shah
Director, Business Analytics

Note: I would like to thank Joe Romero for compiling the data.