As we have known for sometime, Yahoo have announced that they will be moving to a ‘quality based’ algorithm similar to that of Google and MSN adCenter on the 5th of February in the US. A copy of the mail can be seen below;

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.

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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).