Yahoo’s New Ad Platform

Yahoo Search Marketing’s “Panama” Upgrade

—Boom or Bust?

By Nicole Ephgrave

It’s been more than six months since Yahoo Search Marketing rolled out its new ad platform — named “Panama” — to Canada and the U.S.

And recently, I’ve been getting a lot of questions from people who want to know, “SO? Is it working better than the old Yahoo?”

In my opinion, yes!

There was a big outcry when Yahoo first announced its new ad platform. Some advertisers didn’t want Yahoo to mimic Google AdWords and move away from being a “pure” pay-per-click program (in which the highest bidder on a particular keyword gets the highest ranking for that keyword).

Like Google, “Panama” now takes the relevancy of the site into account as well as the amount advertisers bid — so there’s no way to guarantee exactly where you’ll end up in the listings.

(Of course, the upside is, useless sites without any meaningful content can no longer take the top position simply because their owner placed the highest bid!)

When the switch first happened, there was a lot of confusion as advertisers tried to understand how their ads and keywords should best be managed.

However, the feedback since then has been very positive. Not only that, the upgrade seems to have halted the steady trickle of advertisers who had been leaving Yahoo for Google AdWords.

Avenue A| Razorfish — a large ad agency — has been using Yahoo’s new ad platform and recently released the following stats. Since they’ve been using the “Panama” platform, their…

• Search impressions are up an average of 5%
• Click-through rates are up a whopping average of 10%
• Cost-per-click prices actually decreased an average of 6%

I’ve heard echoes of these stats across the board. People are saying their cost-per-click prices with Yahoo Search Marketing are going down — while their click-through rates are getting higher. Interesting stuff!

If you’re not aware of the difference between Yahoo’s old ad platform and this latest version, here’s a brief rundown. “Panama’s” new features include…

• Multiple ad testing: You can now have multiple ads running for the same ad group! An ad group can contain up to 1000 keywords and up to 20 ads and each of your campaigns can have up to 1000 different ad groups.

Plus, new feature called “Ad Optimize” automatically determines which ad is getting the best click-through rate — then makes sure that ad gets shown the most.

• Geo-Targeting: You can set your ads to be shown only in specific cities and regions — which is great if you have a local business or want to test different ads in certain geographic areas.

However, one drawback is, you still have to set up different accounts for different countries. (Hopefully, they’ll fix that soon.)

• Campaign-based Analytics: You can use Panama to set your goals — such as ROI, for example — and the system will automatically adjust to help you reach them.

• More advanced campaign scheduling and reporting: You now have more control over the timing of your ads, which will help you make the most of your budget. (Because you can make sure they only get displayed at times where you get the most converting click-throughs!) Plus, you can customize your reports better.

• A bidding structure that rewards relevant sites with great content: As I mentioned above, Panama uses a bidding algorithm that looks at more than just the bid amount. Other factors are considered as well, such as your click-through rate, landing page relevancy, and site history.

The more appealing your ad is to your audience, the better position you’ll get — and the lower price you’ll pay!

• Instant ad and account approval: You used to have to wait at least two days before your account would be set up. And once you got your account and created your ads, you’d have to wait another two days (or longer!) for your ads to be reviewed before they went “live.”

Now you can set up your account and start posting ads immediately. This is a great improvement!

• A more user-friendly interface: “Panama” gives advertisers better control over their account and makes it easier for them to target their exact audience. Gone are the days of waiting for ad approval and having to set up nearly duplicate campaigns to try testing different ads. And good riddance, I say!

Of course, the system isn’t perfect. Yahoo’s still working on some tweaks and plans to add new features to the ad platform in the near future.

Now, if you’re like most of the people I know, your next question if probably, “Which is better — the “new” Yahoo Search Marketing platform or Google Adwords?”

Honestly, they both have their pros and cons. Yahoo Search Marketing still has a minimum bid of 10 cents — while Google’s minimum is only 1 cent. So depending on the keywords you target, the paid search program you use could have a major impact on your ROI. Yahoo is great for “long tail” keywords but you may end up paying more for general keywords.

However, I recommend you take them both for a test drive and see which works best for you. If you’re a newbie, choose one and learn how to use it well before moving on to the next. Be patient as you run your first pay-per-click campaigns and remember to test, test, test.

Before you know it, you’ll probably be using both!
[Ed note: Nicole Ephgrave is our in-house SEO “wizard.” You can meet up with her in our exclusive “members-only” Search Marketing Lab forum.]