Today’s Byte is probably of most interest to anyone who runs or is thinking about online ads. (For those who aren’t interested in online ads – here’s a quick fun site on the Super Bowl ads http://www.superbowl-ads.com.)  

Google and Yahoo/Overture are the two biggest pay per click vendors. They sell ads on search engines and their content partners sites. Advertisers buy ads through a bidding process and only pay when visitors click on their ads.

I have always loved Overture because they have always made their ad processing very transparent. You can see who is bidding for your terms, how much they are bidding, and you can see their ads. And their ranking was only based on the bids.

Well this week they are making changes. They will no longer rank ads purely based on the bid per click. Now they are also taking popularity of ads into consideration. They claim that this change will allow people to focus on quality of ad, not budget. I have found the opposite to be true; it’s made the system less straightforward for those of us who were OK with taking the time to research terms, prices, and ad copy it takes away our competitive edge that previously made up for lack of deep pockets.

Google has always ranked ads this way. I suspect Google makes more money and so it makes sense for Overture to change too but almost consistently I have been able to build better campaigns for people on Overture versus Google. There are some terms where this hasn’t been true but overall it has.

Also there are times when you don’t want a blindly high click through rate such as when you run a broad ad with a geographic qualifier in the ad copy. For example you might buy “shoes” but include Minnesota in the ads so that only people in Minnesota click through the ads. This reduced click through rate will now impact the ranking of these ads.

So there’s my two cents on Overture and their latest change. I manage ads for a few folks on Overture and so far there hasn’t been a great difference but the real changes are slated to begin on Feb 5 so we’ll see if the ranking algorithm make a difference to the budget or click through rates.