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Yahoo Launches Panama Interface

As you read this, Yahoo is announcing the launch of their long-awaited Panama interface for search marketing, replacing the system that has been in place since the acquisition of Overture.

The full roll-out of the Panama’s ranking algorithm will not launch until the first quarter of 2007, but Yahoo Search Marketing advertisers can choose to migrate to the new interface over the coming months, in anticipation of the full launch. Migration will be via invite, but advertisers can also request a faster switch. They’ll get a chance to preview the new interface before switching, but those deciding to switch will find the migration in not reversible.


New YSM Interface – click to enlarge

As I noted earlier this week, I have been at Yahoo’s Burbank offices for the past couple of days, joining a small group of marketers, selected to be the first outside users to test the new Panama interface. Here’s a rundown of what the new Panama interface will offer immediately:

• A new dynamic design structure using an intuitive interface that includes Ajax and graphical interfaces.

• A YSM dashboard view at login, showing alerts on the account, performance charts and campaign summaries.

• Instant activation of keyword bids on most ads. No more waiting for editorial review, unless you plan on bidding on sensitive content such as trademarked or potentially illegal content. Most bids now go live within a few minutes, mimicking Google’s instant options.

• Enhanced forecasting with interactive graphs for selecting keyword pricing. Move the slider and Yahoo will show you the potential audience reach based upon your campaign’s landscape. This feature allows forecasting on a keyword or ad group level.


Pricing graphs – click to enlarge

• Campaign “Assists” – Advertisers using YSM’s analytics tag will now be shown which keywords assisted in the final purchase. This is a potentially huge development and will allow marketers to identify keywords that helped drive a sale – important for anyone tracking the buy-cycle of their campaign. Yahoo hopes to expand the use of “Assists” so that, in the future, you can track how your sponsored listings impacted sales from other online channels.

• Calculate impressions and clicks based upon newly offered daily spend limits. Identify missed impressions and clicks, based upon your imposed spend limit.

• New keyword selection tools – provide Panama with a few keywords, and the destination URL, and the interface will help you refine your keyword list.

• Watch list flags – single out your most important keywords or those you manage more often.

• Ad creative optimization – select multiple ad creatives and either display them randomly or based on the highest click-thru rate.

• Define both a short and long description for your ads with warnings if your creative is too long.

The launch of the Panama interface was no small initiative. Teams from around the world worked to develop a virtually new platform for YSM, with very little of the original system being included in Panama. Yahoo also moved away from a single datacenter in California and now has “pods” all around the world, allowing for Yahoo to offer a faster and more reliable system for advertisers in different countries.

The next step for Panama is the planned early-2007 launch of their “Marketplace Design” which will see the launch of the new ranking algorithm. The new ranking model will utilize what Yahoo calls its “Quality Index”, a 1-to-5 scale that calculates your ads ranking based upon ad quality and bid price (a similar model to the one that has helped Google rapidly increase its AdWords revenue and provider searchers with better ads).

The Quality Index is a fluid scale that is relative to the competing ads for your selected keywords. The scale will be influenced by a number of factors and Yahoo intends to keep the exact algorithm a secret, but some factors we do know about, include:

• Historical click-thru rate – Yahoo uses a rolling window to determine an ads click-thru rate. Those ads that start off with a high CTR will have to maintain that rate on a continual basis (so it will be difficult to game the system by inflating your CTR short-term).

• Relation of keyword bid to the wording used in the ad copy, title and display URL. If your chosen keyword shows-up in your actual ad and URL, you’ll gain a little extra Quality Index juice.

• Landing page quality will also be a “small” part of the Quality Index score, according to the Panama team.

The launch of Panama is a massive undertaking and it’s understandable why Yahoo has decided to role out Panama in two stages and using a steady migration process. They fully expect advertisers to find bugs and areas for improvement, but Yahoo plans to act swiftly to make any changes needed – this was evidenced during our visit when the user-group noted a few minor design improvements, which the Panama team immediately added to their pipeline of changes. Yahoo also has many releases planned for Panama, so even this initial interface is destined to have more features added over the coming months.

YSM advertisers should be excited about the roll-out of Panama, and Google should be somewhat concerned. Panama’s intuitive interface and graphical representations brings a new level of excitement to paid search. New advertisers will find it easier to get started, while experienced marketers will be able to get very granular with their campaigns.

I found Panama to be very easy to use, make a lot more sense and help me to identify more areas of opportunity for campaigns. If Yahoo can implement the algorithm change as effectively as this interface roll-out, they could very quickly gain the approval of online advertisers and improve their market share.