Big changes coming to Yahoo! Search Marketing

Posted by Richard Stokes on November 29, 2006 to

Yahoo! has announced upcoming changes to its PPC bidding platform that will presumably make it work much in the same manner as Google. The current system of bidding for a particular rank will be replaced with a more complex bidding algorithm that targets, but does not guarantee, a specific rank.

Some of the transparency into the competitive landscape that Yahoo! provides today will be removed, including the "Top 5 Max Bids", "Position", and "Your Cost" columns. In addition, the "View Bids" tool will be removed.

These changes will have a significant impact on Yahoo! customers in that they will no longer have access to competitive information through the YSM interface. AdGooroo customers, on the other hand, will continue to have access to this information, giving them a significant edge over their competitors. In addition, AdGooroo's "coverage" statistic, which was formerly of secondary importance on YSM, will now become of prime importance.

While Yahoo has not commented on how advertising space will be allotted to particular bidders, we are probably safe in assuming at this point that they have implemented algorithms which attempt to reward "relevancy" just as Google does. Presumably, we would expect ads with higher CTRs to move higher in the rankings, while less relevant ads will drop off completely.