Not any longer, beginning the 8th of August, Yahoo will no longer show multiple adverts with the same display url and instead show the ad with the highest ad rank.

What does this mean?

Well, I am sure a few affiliates are a bit upset. Yahoo has always provided a safe haven for affiliates wanting to send traffic directly to the merchants site without having to worry to much about whether their listings were in competition to be displayed against another (in-house or agency).

So whether you are a business, agency or affiliate, who is using the same display url as you? Will your advert be shown, or theres?

A an e-mail from Yahoo to UK advertisers summarises the change –

• Both bid amount and ad quality will determine an ad’s rank in search results the week commencing July 23rd, 2007.

• This will replace the current method, in which ads 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.

How is ‘ad quality’ determined?

1. The ad’s historical performance – its click-through rate relative to competitors and normalised for position.

2. The ad’s expected performance – determined by various relevance factors considered by Yahoo! Search Marketing’s ranking algorithms, relative to other ads displayed at the same time.

Overall ad quality is displayed in a graphical form by the quality index.

You can learn more here at Yahoo.

Yahoo has been migrating accounts over to the new platform for sometime, but don’t expect everyone to have access just yet. Although a selected few might be able to access the new system now, there will be many more that are yet to be migrated and are someway off from being able to actively manage their paid search campaign from within the new platform.

I have been sent over an official PR piece from Yahoos communication agency which reads -

LONDON May 30, 2007: Yahoo! Europe today announces that its new sponsored search advertising platform has launched and that it has started upgrading European advertisers to the new campaign management console.

The platform is designed to enable marketers to better manage their campaigns for an improved overall return on their search advertising investment whilst providing consumers with a more relevant and higher quality search experience.

Richard Firminger, Regional Sales Director of Northern Europe for Yahoo! Search Marketing said, “This powerful new advertising technology marks a key turning point in our efforts to deliver additional value for advertisers and a more relevant experience for users worldwide.”

“Additionally, through this platform, Yahoo! will be able to unlock the full potential of our large global user base and our ongoing investments in creating the largest and most engaged audience.”

To facilitate a smooth upgrade experience for its thousands of European search advertisers Yahoo! will transition customers from its current system to the new platform through a phased rollout.

Beginning today, Yahoo! advertisers throughout Europe will start to receive notifications to access the many new features available in the completely redesigned, easy-to-use campaign management console. Notifications to upgrade will continue in stages over the coming weeks.

What can we expect from the new plaform?

• Fast Ad Activation – provides a streamlined content review process that allows advertisers to launch most new ad campaigns within minutes of submission. This enables immediate engagement with customer, instant reward for quality improvements and the ability to manage last minute inventory.

• Ad Testing – supports automatic rotation of multiple versions of ads to determine the most effective, and over time displays the highest-performing ads more frequently. This empowers advertisers to drive quality, improve click through rate and deliver better value.

• Visible Quality Index – scores ads based on quality, bid and other relevance variables, and will be made visible to advertisers to enable them to gauge and optimise placement when the quality-based ranking model is implemented

• Intuitive Control Panel – provides a simplified interface, allowing advertisers to easily understand their performance and modify or enhance campaigns every step of the way

• Goal-Based Optimisation – enables advertisers to let Yahoo! automatically find the least expensive way to meet their Cost Per Acquisition or Return on Ad Spend goals

• Enhanced Geographic Targeting – powered by Yahoo!’s WhereonEarth technology, enabling Yahoo! to more accurately understand and match to user search intent (“Soho, NY” versus “Soho, London”) and colloquial terms (“restaurant near Tottenham Court Road” is in central London).

• Share of Clicks Forecasting – displays data regarding the bid needed to achieve an estimated specific share of expected clicks

• Assists – allows advertisers to see how ads drive both immediate and deferred conversions across multiple campaigns, not just the last click that led to a conversion.

The new platform has been built for the future so has the capacity to introduce additional distribution options, targeting capabilities and pricing models, as well as additional ad formats enhanced with graphics or rich media. As such Yahoo believe it to be completely scalable to grow and future market trends.

Advertisers can visit the Yahoo upgrade centre here.

Having worked with Andrew Buckman (EU product developer of YSM!) Jensense expects Yahoos launch date to be much sooner than many expect -

It should be available to advertisers by the beginning of May, but my instinct says that advertisers will likely see it sooner than that, in mid to late April.

So what does this mean to advertisers?

If you haven’t already, now is the time to really tighten up your campaigns, adgroups (categories), adtext & keywords as relevancy & CTR will be key to performing in the new ‘quality’ based bidding that will be introduced soon after launch.

Tim Mayer, Director of global web search at Yahoo says -

“The system is going to cause advertisers to work harder to make their listing more relevant, just as SEO’s have been doing in the algorithmic section for a long time”.

In theory, great news for agencies and experts alike then, but perhaps not great news for your average advertiser or business owner?.

Tim Mayer also gives some pointers about Pamanas new algo and what we should be looking out for -

…the algorithm analyzes both advertisement and landing page copy, in much the same way web pages are analyzed to determine their ranking in non-paid search results. At this point, more emphasis is being placed on ad copy than landing page copy, but landing page quality will become more important in the algorithm over time.

Yahoo is also looking at “advertiser information” and “advertiser industry segment,” but is saying little about what this really means. Mayer said that brand is an important factor here—when your search terms include a brand you’ll more often see an advertisement from the brand owner get top rankings.

And the reason behind the new quality based algo?

Well they are somewhat down on how much they get per search in comparison to Google. From the NY times -

Citigroup Investment Research Director Mark Mahaney estimated that in 2006, Google made 4.5 cents to 5 cents on every search, while Yahoo generated only 2.5 cents to 3 cents a search.

In otherwords, Yahoo will now be able to use the same lack of transparency Google and MSN already do to increase the amount of money they receive per search under the guise of ‘improved quality of ads’.

The NY Times reports -

Last Thursday, the company ran a test in which searches originating on the West Coast ran the new ad ranking system. The team started at 3 a.m., and by lunchtime, the engineers gathered in the war rooms, many with bags under their eyes, and appeared satisfied things were running smoothly.

“Our tests today went beautifully,” said Mark Morrissey, vice president for product at Yahoo Search Marketing.

Just how beautiful is the new algo then? We will soon be finding out.

Bid Amount and Ad Quality will Determine an Ad’s Rank in Search Results Beginning February 5, 2007 in the U.S.

With new features like ad testing, geo-targeting and fast ad activation, the new Sponsored Search gives you more ways to connect with customers searching for what you sell.

On February 5, 2007, we are introducing a new ranking model in the U.S. that considers an ad’s quality and bid amount. The new model is designed to help you spend less time in bidding wars and more time creating the most relevant, effective ads, which can help drive better results for your business.

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 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.

What is “Ad Quality”?

Ad quality is determined by:

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.

Overall ad quality is displayed in a graphical form by the quality index.

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. Learn More

Standard match type ads will no longer receive priority placement over Advanced match type ads. Learn More

Fewer Sponsored Search results may now appear at the very top of the page for certain search terms. Learn More

Starting on February 5 there will be a transition period during which forecasting tools will accumulate more data about the new ranking model to provide better traffic estimates. Learn More

To learn more about the quality index, the new approach to ad ranking and helpful tips, please click here.

——————————————————————————–
Further Questions?
If you have questions, please contact our Customer Solutions department via the Support Request Form or call 866-YAHOO-98 (866-924-6698).

However, in a rather strange move, Yahoo are not set to completely change the base cpc bids from 10p. There will still be a small number of ‘keyword categories’ (expected to be in the region of 150K terms) that will remain subject to the original base 10p bid. Categories with high cpc’s such as finance are expected to be those kept to 10p.

I would think implementing a complete change of bid would be far easier than trying to run keywords with different minimum bids, so its a little strange. I don’t have access to the full list of categories, but it would seem the high cpc keywords will be those kept to a base 10p bid. Although you could argue that changing bids on these keywords would not have a huge effect on overall average bids & potential revenue to Yahoo due to the small cpc decrease and intense competition, it could also be seen as a form of revenue protection.

I am hoping for a complete removal of minimum cpc with the upcoming introduction of quality based algo. But we will have to wait and see if this ever happens.

This means they are taking out the position, cost and top 5 max bids columns. Obviously the view bids tool will not be available any longer either. Isn’t it great that all ad platforms will equally lack transparency now?

Columns that will be removed are highlighted below;

These will be replaced with two new columns;

• Estimated average postion which “provides an estimate of the average position in which your ad may be displayed on the results page, based on your max bid and the bids of other advertisers”.
• Bid Range for top positions which “displays the bids for the positions at the top of the search results page for each of your keywords”.

Read up more about the changes over at Yahoos FAQ.

If you want to hear a preview of what Panama will offer, check out a interview by Jensense with ‘Steve Mitgang, Senior Vice President and General Manager of the global team leading the definition, creation and marketing of Yahoo’s advertising products, platforms and services’.

You can download the Mp3 here.