Released on = February 13, 2007, 7:40 am

Press Release Author = Connectthru

Industry = Advertising

Press Release Summary = 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.

Press Release Body = 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." Whatever that last bit
all means for CTR calculation - only Yahoo! knows. Luckily, in order to help you
process these dizzying factors in your head, Yahoo! has offered some insight on how
to improve your CTR with the following tips, straight from its search marketing help
pages:

1) Create different versions of your ads and use ad testing to help determine which
perform better.

2) Make sure you have selected strong keywords for your ad groups.

3) Include keywords in the ad\'s title and description.

4) If using the Advanced match type distribution tactic, use the excluded words feature

Yahoo! expects that all active U.S. advertisers will have upgraded to the new system
by the end of Q1 2007, but the story doesn't end there. Starting in Q2 2007, the
new platform will become available in non-U.S. markets, and just as it was
introduced in the U.S., the new ranking model will be introduced in the last stages
of the system rollout. This is a big change, and it is no secret that it is a move
to compete with Google, which uses a similar search advertising model, but that's a
whole different story, or should I say a two hundred page book. As the upgrades
take place, there will be more to report on the Google-Yahoo! battlefront. . . I
mean the friendly competition.


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