I’ll admit that we have used MSN much less than Google and Yahoo!. It just doesn’t have the keyword inventory of the big two. But we have a client who needed all of the traffic we could get it, as long as it generated traffic at their threshold cost per acquisition. So we are using the three major search engines along with Ask.com and some second tier second engines like Miva.

We were having a very hard time getting any exposure in Microsoft. We blogged about it previously, but it bears worth repeating: Microsoft does constant billing at its threshold billing level for each client, which starts out at only $50. So every time you spend $50, Microsoft will bill your credit card. You might want to let your credit card company know this so that they don’t start denying charges, which will cause your account to go offline until payment is made. And even then there could still be a serious delay. We experienced this problem with this particular client.

However, even when we got the billing issues corrected, our ads were still getting very spotty distribution. And the problem definitely was not our bids or budget – we had plenty to spend and were bidding aggressively.

Finally, after multiple phone calls with Microsoft, someone told us something that explained everything.

Are you ready for this?

For any single campaign, Microsoft divides the budget exactly evenly among the ad groups. Whenever an ad group exceeds its share of the budget, ads for that ad group stop running.

Now…this makes no sense. It completely violates the way paid search works. In a typical paid search campaign, you will have some ad groups that contain high volume keywords for which you expect a lot of clicks…and some ad groups that contain low volume keywords for which you expect few, but much more cost effective clicks. Microsoft’s scheme assumes that all ad groups are equal, which is just not the case.

So, in our case, the ad groups that had the most high volume keywords were being cut off because they were using up their shares of the campaign budget very quickly.

There are two ways around this problem:

1. Set a really high monthly budget for the campaign. If you do this, you will need to watch it very closely to make sure you don’t end up spending way more than you intend.

or…

2. Set up keywords and ads at the campaign level, rather than the ad group level. In other words, if you have two ad groups – one with high volume keywords and one with low volume keywords – you should set each ad group up in its own campaign, so that your budget does not get split evenly between the two.

So far, we have found Microsoft to be slow to get our ads online, inconvenient to deal with because of the low credit threshold, and difficult to use because of the way campaign budgets are allocated. No wonder Microsoft is so far behind in the area of paid search. However, if you can deal with these issues, it is a possible source of more cost-effective clicks than Google or Yahoo!.

If you are trying to manage an MSN paid search campaign, contact Work Media at 888-299-4837 or email Info@WorkMedia.net.