Marin Software, the leading paid-search marketing platform provider, and Razorfish, one of the largest interactive marketing and technology companies in the world and a division of the Publicis Groupe, have today revealed the results of a study into the impact of the Search Alliance on paid search campaign performance.

Key Findings:

· Post transition, the Search Alliance is gaining ground on Google, by increasing its share of paid search Impression by 4% and its share of clicks by 2%, while Google’s share was reduced by the same percentage.

· The Search Alliance has resulted in improved traffic quality for advertisers, as evidenced by higher conversion rates. Excluding the impact of seasonality, conversion rates for the Search Alliance increased by 12% during the research.

· Increased conversion rates and lower costs per click delivered improved return on advertising spend following the transition. Costs-per-click for the Search Alliance ended the year 20% below industry benchmarks, resulting in significantly lower cost per acquisition for advertisers.

In addition to benefiting advertisers, the Search Alliance also has considerable upside potential for both Yahoo! and Microsoft. As of December 2010, the Search Alliance was delivering 21% of paid search clicks, but only capturing 18% of the corresponding ad spend in the North American market. As advertisers move to the new combined platform and the unified marketplace becomes more efficient, the Search Alliance has the potential to capture an additional 3% in advertising spend share, amounting to hundreds of millions in incremental media dollars.

Background & Methodology:

· On July 29th, 2009, Microsoft and Yahoo! announced the Search Alliance, a groundbreaking partnership which saw Microsoft powering search results and sponsored ads for Yahoo! Search. In North America, the transition to the Search Alliance occurred during October 2010. Although the transition took place close to the Christmas retail period, advertisers worried about its potential impact on their business. Beyond the immediate impact, advertisers also wanted to understand how this new marketplace would perform relative to Google.

· To gauge the Search Alliance’s impact, Marin evaluated several key metrics from the Marin Global Search Index which includes over 800 clients collectively managing more than $1.8 billion in annual paid search spend.

· The study evaluated the performance of North American advertisers between August and December 2010. To factor out the effects of seasonality, key performance indicators were normalised against industry averages, using Google as the benchmark for the search industry. We also interviewed leading advertisers to gain qualitative, industry-specific insights.


· “With continued growth in the paid search market, Yahoo! and Bing will become increasingly important channels for advertisers seeking incremental traffic and revenues,” said Ed Stevenson, European MD, Marin Software. “The Search Alliance is paying healthy dividends for the advertisers who had the foresight to build out and optimize campaigns prior to the transition. Given the favourable market conditions in place today, we expect more media dollars to flow towards Yahoo! and Bing as advertisers increasingly adopt the unified platform.”

· “As Razorfish had predicted, the Alliance had minimal impact on our client’s search campaigns,” said Joshua Palau, Vice President of Search at Razorfish. “We are now predicting that the Alliance will lead to more competition, driving innovation in search once again. In fact, December figures for Bing are already up 5%, and we foresee advertisers will benefit from these changes in the long term.”


· Link to Marin Software’s Research Brief:

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Published on: 12:12PM on 28th January 2011