Yahoo’s New Ranking Model goes live Feb. 5

We got the announcement today that Yahoo’s New Ranking Model goes live February 5. This is the change to the PPC ranking algorithim that was announced at the SES show back in August ’06. According to the article, Yahoo will convert all U.S. accounts to the new system on February 5 whether they’ve been upgraded or not.

Yahoo says “this is designed to allow you to focus less on competitive bidding practices and more on the quality of your ads.” They further tell us that, “By improving the quality of your ads and making them more relevant to users, you may be rewarded with a better ranking and lower cost for your ads.”

So what does this mean to you? It means that your ads at Yahoo will be ranked in a process similar to the one at Google Your rank will be determined by the “quality” of your ad and your maximum CPC.

To further confuse things, they also announced that “After February 5, you may notice that some of the search terms for which your ads appear may display more or fewer ads in the top-left area of the page. This could affect your click-through rate and overall traffic on these ads.”

So be prepared for changes in rank and expect to have to revise your ads more frequently as this all shakes out before it settles down.