Company Outlines Plans to Introduce Easy-to-Use Customer Interface, New Forecasting Features, Enhanced Testing and Targeting Capabilities, and Quality-Based Ranking Model
Yahoo! Inc., a leading global Internet company, recently announced that it will begin rolling out a completely redesigned search advertising platform in the third quarter of this year to help businesses more easily connect to Yahoo!’s vast audience.
The diversified Internet media company is looking to encourage both new and existing corporate advertisers to start working with its rebuilt search marketing system in preparation for full introduction during the third quarter of 2006.
In conjunction with the announcement, Yahoo! released the new search ad Application Program Interfaces (APIs) designed to support the new platform. Replacing the original system that created the search advertising industry, Yahoo! new platform will enable marketers to more quickly launch search advertising campaigns across Yahoo! and its distribution network, and help achieve better overall return on their search advertising investment.
Yahoo’s new software system aims to let advertisers target potential customers more accurately based upon the words users type into the search box.
The highly anticipated redesign is the first big overhaul of the search advertising system since GoTo.com pioneered paid search advertising eight years ago. Yahoo paid $1.6 billion to buy the successor to GoTo, called Overture Systems, in 2003.
Understanding how ads actually work together is what we are introducing with the new system, said Steve Mitgang, Yahoo’s senior vice president of advertising. "The current core platform for YSM (Yahoo Search Marketing) has run its course."
The first phase, building the core data platform and technologies, is near completion. The second phase will begin in the third quarter, when Yahoo! makes its new campaign management application and initial features accessible to advertisers. After the majority of advertisers have become familiar with the new features in a given market, Yahoo! will begin the third phase in that market, implementing a quality-based ranking model.
The system is a software-based marketing console to help corporate advertisers and advertising agency buyers understand how to target relevant advertising to Web users based on the keyword search terms consumers use to find information on Web sites.
Advertisers can instantly calculate the cost of acquiring new customers using Yahoo’s data and analytic system. Buyers can also test for the most effective ads and make rapid changes.
It is something the industry has been waiting on a long time, said Paul Kelley, an advertisement buying specialist with the Carat Fusion agency in San Francisco.
Analysts said Yahoo was now catching up with Google’s technology.
The new platform will be deployed on a country-by-country basis, with multiple phases within each market to help ensure a smooth transition for the hundreds of thousands of businesses that advertise with Yahoo! and to allow search engine marketers ample time to build upon Yahoo!’s new APIs.
But the highly competitive online ad market is not standing still. Ad agencies and sophisticated buyers hungry for customers say they are agnostic over which system they use.
Ad systems from Google and Yahoo, along with lesser players Microsoft Corp., MIVA Inc. and LookSmart Ltd. all give advertisers the ability to run ads triggered when Web site users search for popular keywords on a site.
Samir Patel, 28, the founder and CEO of SearchForce, a paid search marketing consultant, said Yahoo’s software fixes basic usability problems that have given Google big advantages in the market in recent years. This may lure more small businesses to become active paid-search advertisers with Yahoo, he said.
The Yahoo ad system also offers geographical targeting based on databases of geographical terms it acquired when it bought London-based WhereonEarth last year. Thus Yahoo can infer when Web searchers mean Soho, London or Soho, New York.
We have designed our new platform to allow advertisers to reach Yahoo!’s audience through search as well as take advantage of advertising opportunities across all of our unique marketplaces, communications and social media assets, said Mitgang.
"Yahoo!’s new technologies and features should encourage more participation in search advertising by making it easier for marketers to understand the performance of their campaigns and experiment more frequently with the medium."
Eventually, the system will also allow advertisers to buy ads across Yahoo, Google, Microsoft and other systems, allowing for comprehensive budgeting, something Google already offers.
Google, which jump-started growth in the pay-per-click search ad market, has seen its market share continue to surge thanks to continued innovation and international growth.
Google has been growing its search business at 80 percent, while Yahoo is growing at half that rate, at around 36 percent, when counting both online display advertising such as banner ads along with search advertising.
The new campaign management application was developed based on input from thousands of advertisers worldwide. The initial version will focus on overall ease-of-use in launching and managing campaigns, and providing greater visibility into campaign performance, coupled with more control over how to improve performance. The new features and capabilities that will be available in the first version of the application include:
Intuitive Control Panel – provides a simplified interface with user-tested navigation, allowing advertisers to easily understand their performance and providing them opportunities to modify or enhance campaigns every step of the way
Enhanced Geographic Targeting – leverages Yahoo!’s WhereonEarth technology, which draws from 15 years of geo-targeting expertise to enable Yahoo! to more accurately understand and match to user search intent ("Soho, NY" versus "Soho, London") and colloquial terms ("restaurant near Fenway Park" is in central Boston, MA)
Fast Ad Activation – offers a streamlined content review process that allows advertisers to launch most new ad campaigns in less than 30 minutes
Ad Testing – supports automatic rotation of multiple versions of ads to determine the most effective, and, over time, displays the highest-performing ads more frequently
Visible Quality Index – scores ads based on quality, bid and other relevance variables, and will be made visible to advertisers to enable them to gauge and optimize placement when the quality-based ranking model is implemented
Share of Clicks Forecasting – displays data regarding the bid needed to achieve an estimated specific share of expected clicks, helping advertisers to set and reach traffic and conversion volume goals
Goal-Based Optimization – enables advertisers to let Yahoo! automatically help find the least expensive way to meet their business goals — defined as Cost Per Acquisition or Return on Ad Spend
Assists – shows advertisers the full value and contribution of every campaign by allowing them to see how ads drive both immediate and deferred conversions across multiple campaigns — not just the last click that led to a conversion
Second Largest
While the enhancements to our platform are dramatic and will provide immediate benefits to our advertisers, we ultimately rebuilt our system with the future in mind, said Mitgang. "Once the first version of the core platform is in place, we will be able to move quickly to build in capabilities that ultimately will provide search advertisers deeper access to Yahoo!’s more than 420 million users, broader advertising capabilities, proven targeting expertise and global distribution network."
The company’s chairman and chief executive Terry Semel said last month that he remained "very excited about Yahoo’s prospects".
By revamping its system, Yahoo is seeking to ensure it can move more quickly to compete in emerging areas of the online advertising market, such as the integration of text and graphical ads and click-to-call Web phone customer services.
Future versions of the new platform will include additional distribution options and audience targeting based on factors that could include demographic information or online behavior, as well as additional ad formats enhanced with graphics or rich media.
According to recent figures, Yahoo has a 27% share of the search engine market, behind Google’s leading 42%. Microsoft’s MSN has a 13% stake, with Ask on 6%.
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