Yahoo! Rolls Out New Panama Algorithm in US
February 6th, 2007 by pamela
Yahoo! is taking the last step with its new Panama ad system today and releasing the new ‘Marketplace Design’ algorithm in the US, the biggest threat to Google’s stranglehold on advertising dollars ever seen.
While parts of Panama have gone live over the past few weeks, the new ranking algorithm will see the system move from a bid price ranking model to a system which takes bid, ad quality and other factors into account when determining where ads are ranked on results pages.
The new system is meant to give users more relevant ad results which sounds good. However, the other reason behind the Panama project has been to increase monetization, which won’t sound so good to advertisers. There are fears that while the new algorithm will increase ad quality, it will also force advertisers to overpay.
Advertisers aren’t used to a system which doesn’t rely on bid price only, so it won’t be a surprise if this stirs up some complaints. In fact, in a New York Times article today Yahoo’s chief executive, Terry S. Semel isn’t resting on his laurels, saying: “It has been and continues to be our No. 1 company priority.”
Although Panama is US only at present, roll out to the UK is expected in the next few months, giving us time to sit back, watch the fall out and prepare the best we can in the meantime.
Search Engine Land’s Mona Elesseily has given us a great review of the technical aspects of the new algorithm including how historical clickthrough rates (CTRs), Expected CTRs, ad copy, bids, URLs and advertiser information are some of the major relevance factors considered in the new algorithm.
Posted in Yahoo!, Paid Search |
