10e20 Blog

After much waiting and anticipation, and at 3pm Pacific today, Yahoo will officially launch their Panama advertising platform. For anyone who is not familiar with the discussion surrounding the Panama system, I’ve put together a small FAQ on what you should know.

What is this Panama?
In a nutshell, Panama is Yahoo’s brand new avertising system which will allow advertisers to pay for search terms based on the popularity of these terms. These advertisements are known as contextual ads, advertisements that are generated based on the content of a web page.

Will Yahoo be down as a result of this rollout?
No. Yahoo expects the changeover to be completely smooth.

What is the goal of this for Yahoo?
Yahoo has rolled out the system in an attempt to catch up with Google. As Marketing Pilgrim puts it:

Thousands of advertisers, and billions of dollars in ad spending, will be watched closely, as Yahoo finally moves from the pure “highest bidder wins” model, to the “bid plus quality” model. By making this switch, Yahoo hopes to increase the average revenue per click from 2.5/3 cents to something closer to Google’s 4.5/5 cents.

What is the goal of this for advertisers?
The system will enable advertisers to have more control over their campaign, and Yahoo’s customer service will be working closely with advertisers to increase understanding into the relevancy of ads. One of the unique features being rolled out is called the “quality index,” which will provide advertisers with insights into how ads are ranked and will also provide analytics to educate advertisers about the effectiveness of their campaigns.

Over time, we’ll likely see Yahoo close the gap between itself and Google with more advertisers signing onto the system, and I certainly look forward to seeing how it plays out.