On February 5, Yahoo! launched its new search marketing ranking model in the U.S. It was the final installment of Yahoo!'s new enhanced search monetization platform, commonly known as Panama.
February 12, 2007 (Press Release) --
Money Can’t Buy Everything: Yahoo!Search Considers Ad Quality in New Ranking Model
By Julia Lundy
On February 5, Yahoo! launched its new search marketing ranking model in the U.S. It was the final installment of Yahoo!'s new enhanced search monetization platform, commonly known as Panama. Originally, Yahoo!Search Marketing worked solely with a bid-to-position model, whereby a higher bid resulted in a higher rank for an ad in paid search results. However with the new model, Yahoo! will use an algorithm where both bid amount and "ad quality" determine an ad's rank in paid search results. Yahoo!'s aim is to pull the focus away from bidding wars and center it on higher quality ads that search engine users will find more relevant.
Two weeks ago, in a Yahoo! press release, Tim Cadogan, VP of Search Marketing, explained further the reason for this system change:
"By encouraging advertisers to focus on the quality of their ads, we can deliver a better search experience for all of our customers. Everybody wins. We firmly believe that delivering more relevant ads to users will result in more quality leads to advertisers, invite even more participation in our network and ultimately create a more valuable marketplace for users, advertisers, publishers and Yahoo!."
It is most important to note that whether or not advertisers have upgraded to the new Panama system, they will be affected by the new ranking model. So how exactly does this affect you as an advertiser, and how can you prepare for the change? How do you remain the 800 pound gorilla in the wonderful world of PPC?
An advertiser can now be rewarded for making an effort towards well written, higher quality ads by paying a lower bid, and/or attaining a higher ranking. By "higher quality", Yahoo! means to say that the ad is more relevant or appealing. Advertisers who have upgraded to the new Sponsored Search system are privy to their "quality index." The quality index is a relative measure that is graphically displayed as one to five bars. It cannot be calculated until an ad has received its first impression and is updated daily. Gee that's nifty, but *ahem*, how does one quantify quality? Or, at least, how does Yahoo! do it? Ladies and gentlemen (drum roll), I present the resolution to the quality versus quantity conundrum, well, at least for paid search.
To determine an ad's quality index, Yahoo! looks at a few things. First, the ad's historical performance is taken into account, which is determined by its click-through rate (CTR) relative to its position among other ads displayed along with it, kind of like the AdWords and AdSense system. Second, the ad's expected performance is considered, but Yahoo! is a bit cryptic when it comes to explaining how this is determined, stating only that various relevance factors are considered by ranking algorithms. Some of the various factors are reported to be landing pages, URLs, and “advertiser information/industry segment.” Wha
By Julia Lundy
On February 5, Yahoo! launched its new search marketing ranking model in the U.S. It was the final installment of Yahoo!'s new enhanced search monetization platform, commonly known as Panama. Originally, Yahoo!Search Marketing worked solely with a bid-to-position model, whereby a higher bid resulted in a higher rank for an ad in paid search results. However with the new model, Yahoo! will use an algorithm where both bid amount and "ad quality" determine an ad's rank in paid search results. Yahoo!'s aim is to pull the focus away from bidding wars and center it on higher quality ads that search engine users will find more relevant.
Two weeks ago, in a Yahoo! press release, Tim Cadogan, VP of Search Marketing, explained further the reason for this system change:
"By encouraging advertisers to focus on the quality of their ads, we can deliver a better search experience for all of our customers. Everybody wins. We firmly believe that delivering more relevant ads to users will result in more quality leads to advertisers, invite even more participation in our network and ultimately create a more valuable marketplace for users, advertisers, publishers and Yahoo!."
It is most important to note that whether or not advertisers have upgraded to the new Panama system, they will be affected by the new ranking model. So how exactly does this affect you as an advertiser, and how can you prepare for the change? How do you remain the 800 pound gorilla in the wonderful world of PPC?
An advertiser can now be rewarded for making an effort towards well written, higher quality ads by paying a lower bid, and/or attaining a higher ranking. By "higher quality", Yahoo! means to say that the ad is more relevant or appealing. Advertisers who have upgraded to the new Sponsored Search system are privy to their "quality index." The quality index is a relative measure that is graphically displayed as one to five bars. It cannot be calculated until an ad has received its first impression and is updated daily. Gee that's nifty, but *ahem*, how does one quantify quality? Or, at least, how does Yahoo! do it? Ladies and gentlemen (drum roll), I present the resolution to the quality versus quantity conundrum, well, at least for paid search.
To determine an ad's quality index, Yahoo! looks at a few things. First, the ad's historical performance is taken into account, which is determined by its click-through rate (CTR) relative to its position among other ads displayed along with it, kind of like the AdWords and AdSense system. Second, the ad's expected performance is considered, but Yahoo! is a bit cryptic when it comes to explaining how this is determined, stating only that various relevance factors are considered by ranking algorithms. Some of the various factors are reported to be landing pages, URLs, and “advertiser information/industry segment.” Wha
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