The overhaul abandons the keyword bid system for a ranking formula -- although according to a report in the Financial Times, there will be a number of "secret factors" in the method Yahoo! uses to decide which ads are delivered as part of search results. These will include a relevancy ranking system.
Yahoo! revealed details of the new system today, ahead of full implementation of the service during the third quarter of 2006. It is the first major change for Yahoo! search engine advertising since it bought GoTo, subsequently renamed Overture, in 2003.
The company said the new system, which will be rolled out country by country, would help advertisers launch their search campaigns more quickly and deliver better returns.
The interface will be easier to use and have improved geographic targeting, based on Yahoo!'s WhereonEarth technology. ±±¾©Èü³µpk10s will be able to be launched in under 30 minutes, and Yahoo! is introducing an automatic system so that multiple versions of ads can be tested so that the most effective ones are shown more frequently.
Steve Mitgang, Yahoo!'s senior vice-president of advertising platforms and products, said: "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."
Last week, MSN said it was introducing its AdCenter service to the UK later this year. It allows advertisers to more strategically plan and buy their online search, contextual or online display ads.
Yahoo!'s original system relied on advertisers bidding for keywords to get them prominence on the search results page, and then paying for the number of clicks through. But this led to problems because it allows advertisers to hog a key position. Also, less relevant contextual ads mean fewer clickthroughs for Yahoo!, and therefore less revenue.
Google dominates the search engine market, with 42% of web searches made using its technology. Yahoo! is in second spot with 27%, while MSN has 13% and Ask has a 6% share.
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