Search engine marketing industry starts transition to new Yahoo system
The search marketing industry’s adoption of Yahoo Inc.’s new Sponsored Search search engine marketing initiative, which started this week, has gone relatively smoothly, with only a few glitches, say executives of search engine marketing companies. Some have experienced problems translating keywords, URLs and ad campaigns, but Yahoo has been responsive in helping them correct problems, executives said.
Yahoo’s implementation of the new Sponsored Search--known by many by its working title, "Panama"--marks one of the largest and most important changes in search engine marketing. Until now, Yahoo’s search results differed significantly from Google’s and MSN’s in that Yahoo’s results were based solely on how much an advertiser was willing to pay on a per-click basis for positioning. Google and MSN, by contrast, applied an algorithm that took into account the number of clicks on an ad, thus presenting in a more prominent position ads that consumers, by their clicks, said were more relevant to their searches. Yahoo’s ads will now be ranked by relevancy, too.
The change has been long anticipated in the search engine market. “This absolutely has our support,” says Kevin Lee, executive chairman of search marketing company Did-It.com. “We’ve been waiting a long time for Yahoo to make this move.”
Among the problems in the transition that search marketing company OneUpWeb experienced were characters being dropped from ads, words being dropped from headlines and mis-matches between keywords and ads, says CEO Lisa Wehr. That resulted in additional effort to make sure that all campaigns were being translated accurately into the new Yahoo database. “They’re really minor nuisances,” Wehr says. She adds that Yahoo staff has been responsive in helping the company deal with problems.
Scot Wingo, CEO of e-commerce services provider ChannelAdvisor, says that his company created a quality-assurance program to avoid such problems. The program loads the terms and all relevant data into Yahoo, then pulls the data back out of Yahoo and compares it to the original. He says ChannelAdvisor has experienced no data problems.
In addition to algorithms that rank ads based on relevance, the new Yahoo system allows marketers to insert the keyword phrase into an ad’s headline and allows marketers to test up to three variations of ads for each keyword, with the winning variation being moved into the rotation more and more. “It’s a good thing,” Wehr says. “Ultimately, it makes Yahoo more like Google, and the interface to Yahoo will be more intuitive if you’re used to using Google.”
Kevin Heisler, an analyst with research and advisory firm JupiterResearch, says that retailers need to make sure that their bid management tools are designed to handle the new sophistication in Yahoo’s search marketing service. “Vendors who sell bid management tools will have to update their own algorithms to reflect the way that Yahoo Panama places ads,” he says.
As for the consumer aspect, most say it’s too soon to tell how consumers will respond. For one thing, most consumers will be unaware of the change. And for another, it will take time for Yahoo to regain market share that it has lost to Google. “Once you’ve lost that share it’s hard to get it back,” Wingo says. “This will probably stop the loss of advertiser wallet share, but the question is: Will the consumer ever go back to Yahoo?”
Google had 51% of consumer searches in December; Yahoo had 24%, according to Nielsen/NetRatings. MSN had 8.4%.
Yahoo is phasing advertisers into the Panama system and expects to have completed the transition by the end of the quarter.
Yahoo’s Matt Heist, general manager, Yahoo Shopping, will speak at the Internet Retailer Conference & Exhibition, June 4-7 in San Jose, in a session entitled Mining the Big Portals Sites for Rich Data Nuggets.
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