Yahoo! Search Marketing have confirmed that they will be introducing a quality score algorithm into calculating how they rank ads on February 5th.
In my opinion this is a necessary change for Yahoo! to help them compete with Google AdWords by improving the relevancy of paid search results. This will also help advertisers with quality websites to benefit from the system by paying a fair CPC while irrelevant or low quality websites will be penalised with increased bids.
Here’s a summary of the ad quality changes from Search Engine Roundtable’s New Yahoo Sponsored Listings Ranking Model post:
“* Both bid amount and ad quality will determine an ad’s rank in search results beginning February 5, 2007.
* This will replace the current method, in which ads in search results are ranked by bid amount only (bid-to-position).
* This is designed to allow you to focus less on competitive bidding practices and more on the quality of your ads.
* By improving the quality of your ads and making them more relevant to users, you may be rewarded with a better ranking and/or a lower cost for your ads.
What is “Ad Quality”?
Ad quality is determined by:
1. The ad’s historical performance – its click-through rate relative to competitors and normalized for position.
2. The ad’s expected performance – determined by various relevance factors considered by Yahoo!’s ranking algorithms, relative to other ads displayed at the same time.
Overall ad quality is displayed in graphical form by the quality index.
Other Important Things to Know
* We recommend that you review your current max bids. Keep in mind you may be charged up to this amount.
* Standard match type ads will no longer receive priority placement over Advanced match type ads.
* Fewer Sponsored Search results may now appear at the very top of the page for certain search terms.”