The facts from our Paid Search Report: Q4 2012:
- Bing has a lower share of impressions, spend and clicks from smartphone and tablet devices.
- Tablet and smartphone devices are projected to account for 50.3% of spend, 43.8% of impressions and 51.7% of clicks by Q4 2016.
- There are over 2 billion dollars of lost potential revenue at stake if Bing does not figure out how to gain market share in tablet and smartphone devices.
In the 17 billion dollar US paid search market, the Yahoo! Bing Search Network (hereafter referred to as Bing) has been scratching away at Google’s dominant market position. Between Q4 2011 and Q4 2012 Bing gained 4 points of impression share and 1 point of spend share, but the rising tide of tablet use poses the greatest obstacle to Bing’s ability to maintain its share of the search market.
Only 7% of total clicks on tablet devices occurred on Bing in Q4 2012, whereas 21% of total desktop clicks came from Bing in the same period. This presents a huge problem for Bing as the share of total clicks from Tablet devices grew 139% from Q4 2011 through Q4 2012 and shows little sign of slowing down. Bing currently has a 19.1% share of all click traffic and 30% of all impression traffic in the US, but when we examine their share by device we can see that there is cause for alarm. Bing does much better on desktop – probably due to the use of IE which still accounts for around 37% of the web browser market – than on tablets or smartphones.
However, Bing has seen some success in its efforts to raise their share of tablet paid clicks, moving 3 points from 7.9% of tablet spend in Q4 2011 to 11.2% of tablet spend in Q4 2012. But there is evidence that this growth has stalled; if the low hanging fruit has been picked and their market share growth continues to stagnate the way it has for most of 2012, they face a huge problem.
If Bing continues to have the same share of clicks across devices, its overall share will decrease substantially over the next 4 years. Assuming growth rate (not overall growth) of tablet and smartphone devices declines by about 33% per year and an optimistic growth rate of 3% for desktop, while holding fixed Bing’s share of search engine traffic across devices, Bing’s spend share is going to drop by about .75 points per year.
Based the current size of the paid search market, this amounts to about $2,010,000,000.00 of lost revenue over the next 4 years. Because the overall size of the market is growing and more search traffic is shifting from desktop to tablets and smartphones, Bing must increase their market share across each individual device type by 4.3% just to maintain their current overall share numbers. Considering that Bing has seen a quarter-over-quarter decline in spend share on tablets from 11.4% in Q3 2012 to 11.2% in Q4 2012, we can see that Bing is facing a potentially bleak future.
To make matters worse, the tablet market is dominated by IOS and Android devices whose Safari and Android browsers make up over 80% (IE only accounts for 1.1% of mobile browsers) of search on mobile browsers according to Net Market Share. While the recent announcement of their partnership with Facebook on graph search and expanded efforts by Microsoft to grow Windows mobile’s share of the tablet and smartphone markets are a start, it probably won’t be enough for Bing to grow by 4.3% per year. Given the growing importance of mobile devices in our daily lives it is becoming increasingly difficult to imagine a world where Bing can grow its market share, unless they develop drastic new strategies not yet heard of.
To get more info on these and other trends in paid search, check out our Paid Search Report: Q4 2012.
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