Yahoo’s Panama Ad Ranking Explained

Posted on 19th March, 2007

Kevin Lee has written an article over at Clickz.com explaining how Yahoo’s new Panama ad ranking algorithm works.

The inner working of the new algorithm mirrors that of Google’s AdWords ad ranking. New variables are introduced into the equation to come up with a final score that determines the position of an ad.

This is far better than the previous ranking system which was based entirely on bid prices alone.

Panama ad ranking calculates the ad position by multiplying predicted CTR with bid price. A change in CTR or bid price – measured as a percentage change – will affect the ad’s position.

Like Google AdWords, relevancy plays a crucial role in determining your CTR and thus your ad position here. Improve your ad position, Kevin recommend you enhance relevancy by

  • Reorganize ad groups
  • Test new titles and descriptions
  • Review landing pages – although Yahoo doesn’t take landing page into account when calculating a score
  • Review bids – increase your bids as the last resort to secure better position.

If you are already familiar with the best practices in Google AdWords, you can easily apply them to Yahoo Search Marketing and this should help in keeping you ahead of your competitors.

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