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Tuesday, October 17, 2006

No Turning Back: Panama Goes Live

More soon - posting in LAX :)

As of today, the first wave of advertisers are converting over to Yahoo’s new Panama ad system. The system will be made available to all advertisers in the U.S. by year end. Once they migrate, there will be no opting back for the current Direct Traffic Center, a fact which is unlikely to generate any tears.

On Monday, along with a small group of other visitors (bloggers and authors such as Barry Schwartz, Jennifer Slegg, Andy Beal, Catherine Seda, Greg Sterling, and Mona Elesseily) to Yahoo Search Marketing Headquarters in Burbank, I enjoyed a live demo (more than a demo, since our ads showed up live on Yahoo Search, from our actual Overture, er, YSM, accounts). YSM is now totally rebuilt and operating on different machines with a different tech team, while the DTC team maintains the legacy system until the last advertiser is migrated off sometime in early 2007.

A Long Ride into “Roosevelt Station”

A lively narrative led by John Slade, Senior Director of Global Product Management, gave us a feel for the hectic but structured development process over the past 18 months leading to the countown to rollout yesterday, the day before Yahoo’s quarterly earnings call. Slade looked tired, which to us was a good sign. He spoke passionately about the feature set of the new product (“Panama”) as well as the new scalable development process (“Roosevelt”) which will add agility to Yahoo’s marketing platform going forward. Zod Nazem, Yahoo’s CTO, explained how resources were migrated from within Yahoo to build Panama; David Ku, VP of Engineering, spoke about how insights from Yahoo Search were integrated into the ad platform design, specifically around the new ranking algorithm. A variety of other team members – John Kim, Betty Park, Brian Acton, Tim Cadogan, David Pann, Darshan Kantak, and Mark Morrissey, introduced themselves and answered questions. Steve Mitgang, Senior Vice President and General Manager of YSM, spoke at a high level about the intuitive needs of platform users worldwide.

In setting up my own dummy ads, I found the system intuitive to read as well as operate. The overall paradigm mimics Google AdWords, with the structure Account > Campaign > Ad Group > Ad being familiar to any search marketer today.

It’s interesting to reflect back on the fateful day when Google rolled out version 2 of its AdWords platform, in February 2002. At that time, it essentially tipped its cap to the auction model and the pay-per-click concept popularized by Yahoo – and wound up paying a hefty patent settlement as a result. But what Google did to improve on that was significant. As the Yahoo team acknowledged, the current DTC is like an unsophisticated spreadsheet. Google’s ranking algorithm and campaign reporting and setup features moved AdWords significantly ahead of Yahoo, where it stayed for nearly five years. Today, Yahoo’s in the position of mimicking Google’s offering. So is it a me-too product? Well, from the perspective of our clients, that wouldn’t be so bad… we like AdWords – it scales, and it works. Now YSM does too.

Key missing features now included in the new product are bidding by ad group and multiple ad rotation. Advertisers who migrate over will no doubt find these helpful and begin using them right away.

A number of account migration features are available too, but may be more in the background for power users.

There were also a number of unexpected features. Imperfect, but welcome, is a continent block feature.

I had a quick discussion with Yahoo exec Josh Siegel that evening… he acted surprised ... as in... “so, a lot of advertisers would literally expect that U.S. geotargeting would literally mean that clicks would come from that country?” Um, yeah.

We got an extensive rundown of the new ad ranking formula. The pricing formula may include a larger than expected price discount for ads with very high relative quality score. Other relevancy factors will be included in the Quality Index. Yahoo won't reveal much, but in an upcoming newsletter for Page Zero Advisor subscribers, I'll get into more detail. I'm also hosting a PZCast audio roundtable of all the attendees of yesterday's demo. We're recording that Friday - again it will be available to PZ Advisor subscribers. (see page-zero.com for subscription info)

Potential impact on search user satisfaction – the emphasis on quality creates better user satisfaction so both more revenue for Yahoo *and* potentially stems slide in search market share. But is it enough?

Overall, this is a huge improvement, with everything from fast ad activation to helpful, intuitive reports. Eye candy includes excellent projection tools with scenario graphs to indicate projected clicks based on increased bids and thus improved ad position.

That's the first quick report of several. Congrats to Yahoo on a historic product rollout. Back tonight for more.

Mona Elesseily, my colleague now working on the "Panama" version of her Yahoo Search Marketing Handbook, will be blogging her thoughts shortly, also.

Posted by Andrew Goodman




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