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:
- 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.
- 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.
- 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.
- 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.
- 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.
- Improve Targeting Capabilities – Add the ability to target by age, gender, occupation, zip codes, etc. MSN AdCenter have announced they will have this functionality
- 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.