New in-depth research on Yahoo’s Search Marketing system, Panama, provides interesting information that’s of benefit to marketers.
Yahoo’s new Panama search marketing platform is a vast improvement over the Internet giant’s previous system, but small advertisers have not benefited to the same degree as their large counterparts, according to an independent report.
The report, based on an analysis of 25 campaigns, was done by New York-based Reprise Media, the search marketing firm acquired in April by ad holding company Interpublic Group…
“Inside Yahoo Panama” by Reprise Media, offers a holistic perspective on this important new platform, comparing it to industry leader, Google, in a number of areas including campaign management, user interface, systems integration and performance.
Panama, launched in February, is Yahoo’s long-delayed answer to Google’s AdWords. Google has rocketed past Yahoo in past years in part based on its system of “quality”-based bidding, which positions search ads in part based on their popularity. The system has allowed Google to squeeze more profit out of its search advertising business.
Before Panama, Yahoo ranked ads based just on the price of the bid. That resulted in fewer clicks per search than Google, and thus less money. Google currently makes 12 cents per search, compared with 8 cents for Yahoo, according to an estimate by Rob Sanderson, an analyst with American Technology Research.
Yahoo’s new platform features a host of new campaign management tools, a new user interface, better technical integration, and most importantly, quality-based bidding, all of which were seen as necessary for the company to close the gap with key rival Google.
“The new features were not just nice to have, but essential,” said Anthony Iaffaldano, Reprise director of marketing.
But Reprise said further improvements are needed. “In many ways Panama falls short of Google in terms of ease of use, degree of flexibility and reporting options. In many ways we find Panama’s handing of data vastly better than Yahoo’s previous… platform, but still inferior to Google AdWords,” the report states.
The report analyses the campaign launch process under Panama as well as three months of performance data.
According to the report, Yahoo campaigns improved significantly in several areas since Panama’s release, with cost per clicks declining more than six per cent. Panama has also boosted Yahoo’s click through rate, the measure of how often a user clicks a search ad, by 32 percent,
That means users are seeing more relevant ads, advertisers are getting more traffic, Yahoo is raking in more pennies for each click.
The report’s key findings include:
- Panama establishes industry standards: Many of the changes between systems move Yahoo’s structure and tools much closer to existing platforms at Google and MSN.
- New targeting options will drive revenue: With new options like geo-targeting and enhanced tracking of contextual placements, Yahoo is placing emphasis on two areas of the market that are currently underserved.
- Big Companies are at an advantage: Panama increases the complexity of managing search marketing campaigns with Yahoo, making it harder for small market companies to compete with their big-brand competitors.
This good news for Yahoo is tempered by concerns for small marketers. While large marketers –those spending more than $40,000 per month on search ads — saw their clicks increase 15.7 percent with Panama, small marketers saw virtually no change. In addition, large marketers saw a nice 11.1 percent decrease in cost per click — a function of large marketers perhaps not having to outbid small marketers — while small marketers actually saw a 5.7 percent jump in cost per click.
With its new features, Panama has become very complex and small marketers cannot take advantage of all the new features, Iaffaldano said.
While Panama will help Yahoo in its battle against Google, it won’t alone be enough because Yahoo faces a more fundamental problem seeking more advertisers, who ultimately provide the higher rates per click, Iaffaldano said.
The firm’s general consensus about Panama is that “it represents a huge improvement from its predecessor, the Direct Traffic Center (DTC).”
Managing Partner, Reprise Media, Joshua Stylman, said, “DTC had become an antiquated platform. This upgrade allows Yahoo to compete more readily with Google and MSN, which can only mean good things for the industry as a whole.”