Search-ad race heats up with Microsoft entry

Microsoft which expanded the personalised ‘search’ feature early this week, is looking to take on Google , say experts.

Search already accounts for one-in-five dollars spent on advertising, globally, and is eating into the share of advertising expenditure by corporates. “In India, Google search advertising is around $0.3 billion and expected to grow by 22-25 per cent CAGR for the next three years,” says Shrenik Gandhi, Chief Executive Officer and Co-Founder, White Rivers Media, a digital marketing company.

Microsoft is keen to join the leagues of ad tech companies — Google, Facebook and Amazon — who are into search advertising. Abdulla Basha, Co-founder, Social Frontier, a content marketing platform, says: “Though biggies are trying to enter search advertising, it will be tough to beat the pioneers since they have the first-mover advantage.”.

A report by Publicis-owned industry forecaster Zenith has also noticed the upward rise in search. Over the next two years, one third of all global ad spend growth is set to be driven by paid search and social media spend. Annual global ad spend is on track to hit $581 billion by the end of 2018.

Zenith raised its predictions for global ad spend growth from 4.1 per cent to 4.5 per cent until 2020, 67 per cent of which will come from investments in paid search and social media ads.

In India, digital advertising spends were pegged at ₹9,266 crore by end-2017, growing at a rate of 27 per cent over 2016. Growth was expected to continue at a CAGR of 30 per cent to touch ₹12,046 crore by December 2018.

A mid-year report by the Internet and Mobile Association of India and Kantar IMRB showed that search has already cornered a lion’s share of digital ad spending. Almost 27 per cent of total digital ad spends, at ₹2,502 crore, is made on search.

Holding an advantage in this realm are Google, Facebook, and Amazon. Social Frontier’s Basha says, “Google owns almost everything, from search to even maps and location. They have every detail of the user. Facebook, on the other hand, is the social giant which profiles the user by interest and behaviour.”

Amazon, on the other hand, “is a leader in the e-commerce industry and has even become the top search engine when it comes to product search. Data shows people search for products on Amazon first, and then go to Google in case the product is not available on Amazon.”

Corroborating this, Gandhi says intent-driven marketing, which is classic ‘pull’ marketing is key. “Google search has an intent pull, but Amazon and Flipkart search ads has a ‘Shopping Intent Pull’. When a person logs on to Amazon or Flipkart, there is a larger likelihood to buy, as he is in a shopping atmosphere and not a browsing universe. User experience is what is going to choose the winner in the long term.”

Unveiling an ambitious effort to overhaul its search experience in Office, Windows and Bing to start with, Microsoft Search, the new search experience is set to combine traditional search results with commands, app features, and personalised results. Microsoft is to also incorporate AI to make search more effective and the results more accurate, the company said in a blog post. Google has already released a suite of machine learning-based ad tools this July, which is helping optimise ad creative and placement based on the browsing habits of users across its search engine and YouTube.

While all existing players are continuously improvising their products for better user experience, Basha says, “Google is all about intent-based advertising, and Facebook’s advantage is the social graph. Amazon basically represents what one intends to buy and, unlike any of the others, owns that ‘buy’ touch point. This covers the buying cycle of the user- intent, social and the real purchase.”

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