Yahoo Panama Morphing Into Google

Yahoo announced today that it is changing to the max bid and quality score method of bid pricing in Sweden - interesting place to beta.

Okay Yahoo is starting to look a lot like Google's little brother. Google makes changes and within a month or two Yahoo does the same thing. Easy really when you know Yahoo is using the same platform as Google.... Panama is a Yahoo tweak of the Google AdWords platform.

I asked this question when Yahoo adopted the Google 'black box' method - how much of the money Google paid to Overture for using their PPC concepts did Yahoo give back?

I was told it was all worked out when they first made the settlement arrangement. Guess 'The Blob' as Yahoo called the Overture platform was just too much for them to fix.

The announcement today came in the following email:

Bid Amount and Ad Quality will Determine an Ad's Rank in Search Results in Sweden the week commencing October 22nd, 2007.

Dear Advertiser,

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.

During the week commencing October 22nd, 2007, we are introducing a new ranking model in Sweden that considers an ad's quality and bid amount. The new model is designed to help you spend less time in bidding wars with other advertisers 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 the week commencing October 22nd, 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.
Example of How Ads May be Ranked
The graphic below helps illustrate a scenario that may result from this change:


Note: The graphic above is provided for illustrative purposes only, and will not actually appear in your account.

What is "Ad Quality"?
Ad quality is determined by:

The ad's historical performance - its click-through rate relative to competitors and normalised for position.*
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.

About the author

Frank Watson has been involved with the Web since it started. For the past five years, he headed SEM for FXCM -- at one time one of the top 25 spenders with AdWords. He has worked with most of the major analytics companies and pioneered the ability to tie online marketing with offline conversion.

He has now started his own marketing agency, Kangamurra Media. This new venture will keep him busy when he is not editing the Search Engine Watch forums, blogging at a number of authoritative sites, and developing some interesting online community sites.

He was one of the first 100 AdWords Professionals, a Yahoo and Overture Ambassador, and a member or mod of many of the industry forums. He is also on the Click Quality Council and has worked hard to diminish click fraud.