Say it ain't so! Yahoo introduces Ad Quality into ad rankings

I already despise the Google Quality Score for its lack of transparency as I believe its a way for Google to hike up bid prices. Well, apparently Yahoo thought it was a good idea because starting Feb. 5th paid search ads will be ranked using an “Ad Quality” ranking.

According to the email Yahoo sent: Here’s a quick summary of this important change:

• Both bid amount and ad quality will determine an ad’s rank in search results beginning February 5, 2007.
• This will replace the current method, in which ads in search results are ranked by bid amount only (bid-to-position).
• This is designed to allow you to focus less on competitive bidding practices and more on the quality of your ads.
• By improving the quality of your ads and making them more relevant to users, you may be rewarded with a better ranking and/or a lower cost for your ads.

The email goes on to talk about how the Ad Quality will work

Example of How Ads May be Ranked
The graphic below helps illustrate a scenario that may result from this change:
New Ranking Model

What is “Ad Quality”?
Ad quality is determined by:

1. The ad’s historical performance – its click-through rate relative to competitors and normalized for position.
2. The ad’s expected performance – determined by various relevance factors considered by Yahoo!’s ranking algorithms, relative to other ads displayed at the same time.

Overall ad quality is displayed in graphical form by the quality index.

Other Important Things to Know

* We recommend that you review your current max bids. Keep in mind you may be charged up to this amount. Learn More.
* Standard match type ads will no longer receive priority placement over Advanced match type ads. Learn More.
* Fewer Sponsored Search results may now appear at the very top of the page for certain search terms.