Searching Beyond the Paid

Wednesday, February 07, 2007

Yahoo Search Marketing's New Ad Ranking Algo

Yahoo's new PPC interface, Panama, has garnered much attention in the PPC space recently. The latest big news is the change from ranking ads solely by bid amount to ranking by a formula which takes ad quality, among other things, into account. Details at the YSM Blog.

The new ranking system launched Monday afternoon, Feb. 5. What's the word on the SEM street? Not much, so far. Barry at SE Roundtable wonders why there isn't more buzz in the forums about it. In fact, he's "shocked" by the relative silence on the issue. I'm shocked, too, but I do think there are valid reasons for the quiet:

* It's still early. Yahoo hasn't said exactly what time they flipped the switch, but most accounts put it at around 3 p.m. Eastern time on Monday. That's late in the work day for us Eastern time zone folks; and, it means the first full day of the new system was yesterday. It's hard to draw any major conclusions from one day's worth of data.

* Yahoo's advertisers aren't tracking their positions and/or results. Yahoo doesn't make it easy to check ad position - there isn't a column for "average position" on any of the campaign or ad group summary screens. To see that info, you have to drill down into each ad group, or run a URL Performance report. Neither is a great option. And as far as tracking results, well, we all know that many search marketers don't track their conversions at all, or don't do so very accurately. Even those of us who do track probably don't look at this on a daily basis.

* The new system didn't have much effect on advertisers' positions or other key metrics. I did check both our average position and conversion % for yesterday. Average position was exactly the same as it was on 1/30, the previous Tuesday. Conversion was actually slightly higher than our average. I spot-checked several of our highest-traffic keywords, and with only a couple exceptions, we were in position 1 or 2. However, many of these keywords were in those positions BEFORE the switch - so, overall, this hasn't had a big effect on us. I suspect the same can be said for many other Yahoo advertisers.

* Yahoo is just too small for marketers to care about. I have heard from at least a few advertisers that in comparison to Google Adwords, overall sales and ROI from Yahoo is so small that they barely spend any time on their account. Now, one could argue that there was a big forum buzz when Panama first launched, which is true. However, a new interface is different from a new ranking system - we work within that interface every day, so when it's not what we were used to, it throws us off! Furthermore, the old Direct Traffic Center was so awful for so long, Panama was bound to create some buzz just because of how different it is.

I suspect all of the above explain the relative silence. Speaking for myself, I would have posted something if I saw anything dramatic either way from the new ranking algo - but since nothing really changed for us, I didn't have anything to say about it!

Of course all eyes are on Yahoo and this new algo, and we'll all be watching the various forums for feedback and comments.


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