Yahoo's Improved Ad Service

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There's no quicker solution than pay-per-click search-engine advertising to boost the number of visitors to your e-commerce Web site. But which PPC service should you use?

Yahoo's upgraded Sponsored Search service, code-named Panama, is the biggest improvement in years to the company's PPC advertising service. Panama makes Yahoo Sponsored Search a strong contender to Google's AdWords, which I wrote about in an earlier column. Panama is faster and easier to use than AdWords in some areas, such as reporting, though I do have some minor concerns.

Google AdWords Has Huge Lead

If you want to significantly increase visitors to your site, you need to select a PPC service that's linked to a popular search engine. In the U.S., you have three main choices. The December 2006 statistics from search marketing consultancy Hitwise show Yahoo with a 22 percent share of U.S. search volume, second to Google's 63 percent and ahead of Microsoft's 9 percent share.

I'm a longtime user of Yahoo's PPC service, dating back to the days it was and you could still buy a good search term for a penny a click. became Overture, which Yahoo acquired after the PPC system started delivering much of the search engine's ad revenues.

Despite being an early front-runner in PPC advertising, Yahoo's Sponsored Search stumbled badly, falling behind Google's AdWords. Not only did AdWords display advertisements to a larger audience, but its user interface was also easier to understand and it offered more flexibility.

As with other search-engine PPC services, Yahoo ads are linked to search terms (keywords) that you specify. If you sell left-handed widgets, you can have your ad displayed when search engine visitors query that term. You are charged when someone clicks on your ad and is then transferred to your Web site.

Smoother Interface, Better Reports

Panama began rolling out to customers late last year. Yahoo says all U.S. and Canadian users should be converted to Panama by the end of March. International users will be converted later.

Top-notch reports on Yahoo's upgraded Sponsored Search let you see exactly where your ad visitors are located, including the state or metropolitan area.
Top-notch reports on Yahoo's upgraded Sponsored Search let you see exactly where your ad visitors are located, including the state or metropolitan area.
Panama abandons Overture's clunky, spreadsheet-like interfaces, which are organized by keywords, in favor of a more intuitive marketing-oriented interface that's built around advertising campaigns. It's easier to view graphs and performance reports, which you can now click to drill down and examine in detail.

Yahoo's on-demand reporting system is faster and easier to use than the batch-oriented reporting used by Google's offering. AdWords requires you to first create a detailed report template, request the report, and then wait, typically several minutes, until you can view the results.

Yahoo says new ads or modifications to existing ads are now approved within minutes, not days, which I've confirmed.

New Keyword Bidding System

Yahoo also plans to finish reworking its keyword-bidding process later this quarter. In the old system, the highest bidder for a keyword automatically ranks first in advertising results. You can view the maximum bids of top competitors to determine the bid required to reach the highest positions.

In the new system, you set a maximum bid and the service determines your ad rank and your actual cost based upon both the quality of your ad and competing bids. You can no longer see competing bids, so some longtime Yahoo users will object to the new lack of transparency. The new system is similar to AdWords and should require less time for newcomers to fine-tune.

Yahoo has also enhanced its geotargeting feature, which lets you restrict ad displays to Internet users in a limited area. This is very useful for small businesses that serve local markets. You can select by continent, country, state/province, or define a circular area by postal code. You can also select by Nielsen Media Research Designated Market Area, which divvies up the U.S. into more than 200 metropolitan areas. However, Google's AdWords permits even finer gradations, since you can outline an arbitrary area on a map and show ads only to those located within it.

Rough Spots

I noticed a couple of issues with Panama.

For example, I initially had problems logging in to my upgraded account when using Internet Explorer 7. However, these went away when I adjusted my browser's security settings.

I also had difficulty with Yahoo's Content Match service, which you can get when you sign up for a Sponsored Search account. CM places your ad on independent Web sites affiliated with Yahoo. However, I found the CM sites weren't nearly as context-relevant to my ads as the sites displayed on Yahoo's search-engine results. For example, my ad for a highly specialized search term, "computer forensics security," was displayed on CM pages about wrestling, computer games, a cordless phone manual, houses of the European renaissance, entertainment news from Jamaica, and other seemingly irrelevant pages. Consequently, I received hundreds of thousands of CM displays within a couple of hours--and blew through twice my daily budget.

Yahoo officials say the company is looking into this problem. Meanwhile, however, I recommend exercising caution if you advertise on CM. Use it only with a strict daily budget and closely monitor the results.

Otherwise, however, if you've dismissed the Yahoo PPC service in the past as too cumbersome and lacking flexibility, you might want to give it a second look. It's a good supplement to Google AdWords (or an alternative when the bidding on your desired keywords gets too high) and can help you connect with more potential online buyers for your products and services.

Richard Morochove is an IT consultant and writer who can be reached via e-mail.
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