Live Search gains with advertisers (so does Google)

According to search marketing firm AdGooroo, first page advertising activity on the top three search engines (Google, Yahoo!, Live Search) was up sharply in the first two months of the fourth quarter.

We estimate that Microsoft has increased their advertiser share from 11.5% in Q3 to about 15.8% in Q4 (37% increase), dramatically narrowing the gap with Yahoo! for second place as the engine of choice for search marketers. (For comparison, Yahoo! Now stands at about 22.1% and Google at 80.3%)

These numbers are different than the usual search share numbers, tracking advertising on the search engines rather than end user share.  Marketing news site Marketing Vox pointed out the significance of the numbers for Microsoft and a potential deal with Yahoo!:

Microsoft advertiser share leapt to 16.4%, three percentage points away from closing the gap with Yahoo, which last quarter led by nearly 18 percentage points.

Because Microsoft and Yahoo have little overlap among top advertisers (which generate 80% of all ad impressions), a merger of the two would increase large advertiser count by 157%, AdGooroo noted.

That means more relevant ads, which would lead to more competitive bidding and higher monetization levels, not to mention the emergence of a "real credible competitor" for Google, Microsoft’s CEO Steve Ballmer explained last month.

While seasonal swings for the holiday shopping (and advertising) season account for some of the increases, AdGooroo notes that “the increase in active advertiser counts is surprising given the current environment of gloom and doom”.  The chart below, from AdGooroo, shows the increases:

Adv Count Growth

(click for larger picture)

You can get the complete report by requesting it free from AdGooroo.