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As reported by Forbes, Yahoo! is finally rolling out the test versions of their version of the Google AdWords ranking algorithm, called Project Panama. Like Google, Yahoo! Search Marketing advertisements will be ranked on keywords searches by the bid amount advertisers are willing to pay for keywords and the click index (measure of relevance) for the ad. Its about time!
If you have been following Google’s financial performance as compared to Yahoo!’s over the past couple of years, you’ll notice that Google’s margins have far exceeded Yahoo!’s. Back in October 2005, Google released a new AdWords quality and relevancy ranking algorithms that have contributed to the higher than expected Q4 earnings for Google and widening of margins as compared to Yahoo! Essentially Google AdWords is tuned to maximize their revenues.
As a Yahoo! stockholder and a former employee, I have been continually frustrated by the lack of progress Yahoo! has had in whipping the former Overture division into shape. The new Yahoo! Search Marketing platform was rumored to have been beset by Microsoft Vista-like delays and setbacks for almost two years. According to the Forbes article it is estimated this new platform will be released on the second half of 2006.
Here is my wish list for the new Yahoo! Search Marketing Platform:

1. A|B Testing - The currently Yahoo! doesn’t allow you to rotate more than one advertisement at a time. That means I can’t test and improve my ads on the Yahoo! platform. Since I am also restricted by Yahoo!’s strict 3-4 business day editorial review this makes it virtually impossible to test ads in a meaningful way. If Yahoo! is going to factor in the click index into the ranking the system should encourage testing.
2. Open Up the API - Unlike the Google AdWords API, access to the Search Marketing API is very restrictive. Access to the API typically requires an NDA, advertiser review (they review what you plan on doing with the system), a lengthy legal contract, and negotiating transactional charges.
3. Faster Automated Editorial Reviews - Google AdWords has automated system to flag editorial issues. With Google AdWords your campaign can be up and running with your ad within 30 minutes. There is no reason why Yahoo! shouldn’t have a similar system. The manual editorial process on Yahoo! Search Marketing is way too slow and inconsistent.
4. Real Time Reporting - Google has the ability to report your stats from your campaign at near real time (~15 minute delay). Yahoo! on the other hand requires a 24 hour delay.
5. Opt-Out/Exclude Sites - I would like the ability to exclude or at least bid separately for my ads showing up on low performing parking pages.
6. Improve Targeting Capabilities - Add the ability to target by age, gender, occupation, zip codes, etc. MSN AdCenter have announced they will have this functionality
7. Integrate Yahoo! Publisher Network - I would like the ability to bid on separately for their content network.

BTW… I feel this new search marketing platform has a potential to have a huge positive impact to Yahoo!’s bottom line. As a result I remain long on YHOO as we speak.

Filed by SWong at 6:26 pm under Interactive Advertising, SEM
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I just finished reading Ben Edelman’s great detective work to uncover click fraud scheme utilizing Yahoo! Search Marketing: “The Spyware - Click-Fraud Connection — and Yahoo’s Role Revisited“. This is a great piece and well worth the read for anyone who purchases advertising on the web.

I’d like to expand upon Ben’s post. The assertions of “Syndication Fraud” and the “Pay Per Click Promise” with respect to Yahoo! is much more widespread than what is reported. When an advertiser purchases pay per click advertising on Yahoo! Search Marketing or Google AdWords the advertiser is largely expecting and intend to buy highly targeted contextually relevant search engine advertising. Yahoo! is breaking this “Pay Per Click Promise” by allowing these ads to be placed on pages other than search results. This type of Syndication Fraud is running rampant across the web particularly among parked pages (where domain speculators purchase domain names for the sole purpose of monetizing the natural traffic on them) and dynamic doorway pages (dynamically generated pages are created to fool search engines so they can show up on natural/organic search results).

The reason for this is is search based PPC ads (Google AdWords, Yahoo! Search Marketing, etc.) command a much higher cost than the equivalent content based search ad (Google AdSense, Yahoo! Publisher Network, etc.). Often time the search based ad commands as much as a 5-10X premium over the content based advertisment. The incentives are obviously there for the aspiring domain parking and black hat search engine optimizers (SEO).

The end result shortchanges advertisers who will receive lower quality clicks as a result of these practices. I have first hand experience with this since I have found my advertisements purchased on the Yahoo! Search Marketing keyword for “MBNA credit card” show up across the web on parking pages that have nothing to do with the keyword that I have purchased.

Just check out the following example site (parking page): http://www.m2card.com/

My site (creditcardjungle.com) is listed as the 8th result on the page even though the advertising buy was strictly for search keywords only. Definitely a case of syndication fraud.

Or this one: http://lb5.netster.com/index/Site=bWFkNGFkcy5jb20%3D

This is an example of Google Syndication serving up the ads. Where is contextual placement that I have purchased?

I believe that Yahoo! (& Google) has a contractual responsibility to deliver what was promised to their advertising customers. I feel shortchanged!
Stanley

Filed by SWong at 6:43 pm under Interactive Advertising, SEM
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