Yahoo! It's About Time

Search marketers that have Yahoo! dialed-in as a steady PPC option have been talking for a while now about the much anticipated, way overdue revamping of their administrative interfaces. The Search Team at Congruent Media has had a bunch of clients already transferred from the old system to the new system, and except for the painful manner in which Yahoo! messes-up the account's organizational structure, the upgrades are very welcome.

This morning I received a few emails (all from Yahoo! with the same content - that's another story about deduping multiple instances of addresses on sending a campaign) about another upgrade to the system that is going live on Monday, February 5th. It seems that the folks at Yahoo! finally figured-out that relevancy in search results is more important to the long-term fiscal health of the company than short term profits gained by allowing search marketers to drive up bid costs. So, starting in less than two weeks, PPC positioning on Yahoo! is not simply determined by the highest bidder, but now is determined by "Ad Quality."

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

1. The ad's historical performance - its click-through rate relative to competitors and normalized for position.
2. 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.

Example of How Ads May be Ranked
The graphic below helps illustrate a scenario that may result from this change:


Google has become, well Google, by figuring this (and a heck of a lot more) out much earlier in the game.

Not everyone can be Google though, and Yahoo!'s move is a smart one. As I write this I'm listening to Bloomberg on Sirius and they're talking about Yahoo! being up in pre-trading due to "enhancements to their advertising services." Do you think some traders got the same email I did and put two and two together...