Yahoo! Pay-Per-Click Rankings to Change in February
Wednesday, January 24th, 2007
Paid listings will no longer by ranked solely on bid.
Yahoo (NASDAQ: YHOO) announced that the rankings of pay-per-click search ads on its network will change February 5. Prior to that date, ads are ranked according to the maximum bid per click selected by the advertiser. Beginning February 5, ads will be ranked by a combination of click bid and ad quality (read: click-through rate and relevance). The graphic below illustrates this change.
The change is part of Yahoo! Search Marketing’s Panama advertising platform update. Ad rankings will now be calculated in a fashion more similar to Google (NASDAQ: GOOG) Adwords and MSN (NASDAQ: MSFT) Adcenter. As part of the changes, the famed “Overture Score” used by domainers to predict domain name type-in traffic will likely be discontinued.
Domain name owners can look for an effect on their paid domain parking results. Results displayed on parked pages may take the new rankings into consideration. Although per-click prices for the top ads may be lower, click-through rates should be higher. ParkingDots is an example of a domain name parking company that uses a Yahoo ad feed. Parking services such as DomainSponsor and Sedo, which use Google ad feeds, will not be affected by this change.
Yahoo’s new pay-per-click platform is receiving great reviews, although the release was postponed many times. Wired magazine has an article in its most recent issue about how Yahoo dropped the ball, especially with paid search. Yahoo acquired Overture, which pioneered the pay-per-click market. Although Overture was first to market, its system was bogged down by a legacy architecture which limited scale and flexibility.
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Great graphic, Andrew. I’ve not seen it presented so clearly visually before.
I can’t take credit for the graphic, it’s Yahoo’s