I attended a seminar on various aspects of managing Yahoo Search Marketing (YSM, formerly known as Overture) campaigns yesterday. For those of you unfamiliar with YSM, it is a paid search advertising system that allows advertisers to bid for position within the sponsored listings area of several major search engines (including Yahoo, obviously). Given that I have been managing accounts for clients for about six years, a large portion of it was quite remedial for me. I did learn a few interesting things including some new metrics that you can incorporate and how to measure and interpret them.

What I found most interesting was two things that transpire behind the scenes that have significant influence on our campaigns and which are not widely known outside of YSM circles. Both things have a material impact on our campaigns, so I find it irritating that they are not more widely disclosed to advertisers.

The first is Match Driver, which as I understand it, is a system that YSM is using to map alternative spellings, misspellings, plurals, etc. to a single root term. This would be a wonderful system (as it reduces the number of keywords that need to be managed), except that, as it turns out, it does not apply to all terms and as an advertiser you have no way of knowing which terms are mapped to which – so you either need to submit them all regardless or else potentially miss out on some opportunities.

The other thing that is irksome is how Standard Match and Advanced Match listings are handled. Note that Standard Match is basically an exact word or phrase match – the searcher must enter the phrase precisely as shown. Advanced Match will return results for any search that includes all the words in any order within the search query even when there are other words included as well.

It turns out that YSM uses a “stacked results” system where Standard Matches are shown first, and then Advanced Matches are displayed – regardless of the relative bid amounts. In other words, even if the Standard Match listings bid amounts are lower, they are displayed before the Advanced Match results. So, say that three advertisers are bidding on the phrase “discount cruise” as a Standard Match, and the bids are $0.15, $0.12, and $0.10. Another three advertisers are bidding on “discount cruise” as well, but using Advanced Match, and their bids are $0.45, $0.14, and $0.13. The ads will be shown in the following order:

Standard Match 1 – $0.15
Standard March 2 – $0.12
Standard Match 3 – $0.10
Advanced Match 1 – $0.45
Advanced Match 2 – $0.14
Advanced Match 3 – $0.13

If a pure bidding model were employed (rather than the stacked system), it would be:

Advanced Match 1 – $0.45
Standard Match 1 – $0.15
Advanced Match 2 – $0.14
Advanced Match 3 – $0.13
Standard March 2 – $0.12
Standard Match 3 – $0.10

That strikes me as unfair, especially as this system is not terribly transparent. It basically rewards advertisers for using Standard Match over Advanced Match, with the practical result is that advertisers should almost always use Standard Match. This requires significantly more keywords and ergo requires more work to manage.