Yahoo! Inc recently announced plans to launch a new search advertising platform aimed at taking significant market share away from Google Adwords and protecting itself from Microsoft’s entry into the sponsored advertising arena.
Search advertising has been shrouded with speculation of fraud and inaccuracy recently, so this latest announcement by Yahoo! is sure to offer some solace for unsettled advertisers. The key improvements include a new and improved ad ranking system based on quality and relevance, enhanced geographical targeting, ad testing facilities, quick activation of campaigns and importantly, improved insight into campaign performance.
This is the most significant improvement in the area since the launch of MSN’s AdCenter, with its enhanced demographic targeting capabilities. Yahoo! has suggested after the initial launch, further targeting enhancements similar to MSN’s and potentially behavioral based, will follow shortly.
Other planned improvements include broadening the reach of their advertising network, and investigations into ad formats that will allow for graphics and rich media.
By far, the planned changes to quality and relevance of ad rankings are going to have the greatest impact on advertisers. A scoring system based on Yahoo!’s new Visibility Quality Index, will rate ads based on bids, previous performance, quality and other parameters to determine placements. This will allow advertisers to tweak campaigns to generate better returns on their advertising.
This new system will also help Yahoo! monetize its search advertising in a similar way to Google, who generates twice as much from sponsored advertising. Currently, past ad performance has little bearing on an ads’ placement, which is detrimental to Yahoo!’s bottomline. The new plan will mean more relevant ads will get higher placement which is better for advertisers and Yahoo! alike.
With plans for better campaign reporting/analytics and greater transparency into campaign performance, this new ad platform is sure to put due pressure on Google, who has already coped a fair amount of stick for recent click fraud claims. I am not sure whether this will eliminate the threat of click fraud, but the more intelligent the ranking system the better for all.
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