Yahoo to Update Search Marketing Algorithm Feb. 5th
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Written By Kate Zimmermann | January 24, 2007 | Share This
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February 5th is officially Yahoo’s release date for Panama’s new ad ranking system. In a press release sent out last night, Yahoo announced:
“We are introducing a new ranking model in the U.S. that considers an ad’s quality and bid amount.
Here’s a quick summary of this important change:
- Both bid amount and ad quality will determine an ad’s rank in search results beginning February 5, 2007.
- This will replace the current method, in which ads in search results are ranked by bid amount only (bid-to-position).
- This is designed to allow you to focus less on competitive bidding practices and more on the quality of your ads.
- By improving the quality of your ads and making them more relevant to users, you may be rewarded with a better ranking and/or a lower cost for your ads.”
This is the massive upgrade that search marketers have been waiting for since we began migrating to the new Sponsored Search interface in October 2006. The biggest change to note is that “quality” will become a factor of ad ranking and minimum bid costs. Yahoo has defined “quality” as:
- “The ad’s historical performance - its click-through rate relative to competitors and normalized for position.
- The ad’s expected performance - determined by various relevance factors considered by Yahoo!’s ranking algorithms, relative to other ads displayed at the same time.”
Quality will be evidently be displayed as a graphical “quality index” that will show 1 - 5 colored bars for each ad (1 =”poor”, 5 =”good”). Yahoo included in the release,
“Other Important Things to Know
- We recommend that you review your current max bids. Keep in mind you may be charged up to this amount.
- Standard match type ads will no longer receive priority placement over Advanced match type ads.
- Fewer Sponsored Search results may now appear at the very top of the page for certain search terms”
Yahoo admits that the system has bugs that need to be worked out as advertisers adjust to the change. As a result, migration is voluntary until the end of February (according to our Yahoo account rep). My question is: What happens between Feb. 5th and Feb 28th? Will Yahoo really have advertisers bidding on two totally different platforms, with different UIs? Based on our experience, I don’t think the old platform was built to accommodate quality-based bidding. So, will advertisers who haven’t migrated by Feb 5th get totally screwed over?
Despite the short-run disaster that could arise, Panama will benefit search marketers (and Yahoo) in the long run. For Reprise Media, Yahoo’s adoption of quality ratings will allow us to establish universal best practices for campaign management. For all advertisers, Yahoo offers a competitive alternative to Google’s bid inflation “floor”. Low quality ads in Google are forced to run at inflated prices in order to go live - in Yahoo, however, low quality ads will go live, but simply have low ranking. As a result, low-budget publishers and tail terms won’t be priced out of Yahoo’s market, as they are with Google AdWords. This, in addition to Yahoo’s sophisticated geo-targeting options, will be a huge benefit to local advertisers.
Discussion:
- Getting Better All the Time (YPN Blog)
- Ready or Not Here Comes Panama (Search Engine Roundtable)
- Some Marketers Still Irked By Yahoo’s New Ad System (PaidContent.org)
- Yahoo Search Marketing To Launch New Ranking Model Feb 5th (Search Engine Land)
- Yahoo to Add Quality Score to Panama Feb 5th (Search Engine Watch)
Topics: Yahoo! |