Yahoo is in the process of rolling out several changes, known collectively by the code name “Project Panama,” which will bring many features within its system in line with market leader Google’s AdWords. The most important of these enhancements has yet to launch: a wholesale change in the methodology Yahoo uses to rank its paid-search ads.
Yahoo!, one of the strong competitors to Google, bought Overture in 1997. Overture basically started the entire paid-search market.
This upgrade, due in first quarter, will allow Yahoo to evolve into a quality-based auction, where a series of factors including click-through rate, ad relevancy and keyword choice will have an impact on an ad’s final position. Highly relevant or useful ads that get lots of clicks may actually end up costing less to rank higher.
Yahoo’s Overture is going to change how the system works for marketers and advertisers. The relationship will shift so that marketers learn to converge with their customers. The relationship of marketing and consuming will change to the next level.
Overture will be losing the bid-based auction system. Advertisers will not be able to see what other advertisers are bidding for specific keywords. This new project release will include many of the standard tools already found in AdWords (Google) and AdCenter (MSN) such as budget capping and ad variances.
