The early days of pay per click advertising were much more simple than today. You could communicate more easily to clients, and establish more profitable advertising programs using PPC as a supplement for organic search marketing. Unfortunately, search engine giants continue to tinker with what works best– and we’re now operating in a marketplace that is unfair for those managing pay per click campaigns.

Back in July of last year, Google introduced their “Quality Score” to all AdWords advertisers. This scoring algorithm effectively monitored the landing pages of your ads while determining the overall price in which you should pay in order to obtain traffic on a per keyword basis.

While the move was made to help clean up Google’s programs, it also came on the heels of some important legal matters — most notably a $495 million settlement for click fraud. Understanding their position, I worked with my clients to inform them that this move was one made by Google to help protect advertisers and the entire playing field of AdWords advertising.

Today, I regret having done that.

While the move allowed smaller companies an opportunity to compete on content rather than cost — it has muddied the waters and caused issues for everyone involved. As a service provider, there’s a mysterious cloud that exists. I’m constantly knee deep in a battle to defeat the rising costs of the quality score for my clients. My clients are further frusturated because Google refuses to provide information on how to really improve their pages.

It’s not as though we don’t want to improve things, or, that we want to improve these pages dishonestly. I think I speak for many AdWords campaign managers when I say that we just want more specific information.

While that’s unlikely to happen — Yahoo! has a great opportunity to win back our hearts, as well as many of their former GoTo and Overture advertisers. That is of course possible only if their new system improves upon the flaws evident in Google’s system.

Two days ago, Frank Watson from Search Engine Watch posted that Yahoo will introduce a similar system to Google’s Quality Score to advertisers on February 5th as part of their new “Panama” program. While you can view the entire press release directly from Yahoo, I’ve pulled out some of the more important areas that we need to be concerned with:

“…excited to introduce our new, more quality-focused ranking model because it has the power to significantly enhance the experience we deliver to our users and unlock the full potential of Yahoo!’s search marketing network..”

“…search ads on Yahoo! and its distribution partner sites have been ranked solely by bid price – the higher the bid, the higher an ad appears within the search results. When the new ranking model goes into effect, both bid and the ad’s quality together will determine where an ad appears in the search results. The quality of an ad will be determined by its historical performance in the new system and its expected performance relative to other ads displayed…”

“…Yahoo! is providing advertisers with industry-leading marketplace visibility and features that allow them to better understand their performance and make informed marketing decisions. Advertisers who have upgraded to the new system (code named “Panama”) can gauge the quality of their ads by viewing the prominently displayed quality index within the Panama application. Yahoo! also provides advertisers with an estimated average position and estimated forecast of clicks for their ad campaigns, based on budget allocation and ad quality…”

So what does all this mean?

For one, we can expect something similar to what Google has in place with their Quality Score system. The critical area though is one where feedback becomes important. Messages like “Improve Quality” or “Increase Bid to XX” do nothing for me. If the game is about performance where price is not a factor — why should advertisers have to pay more?

The bottom line is that improving landing page quality is highly subjective. More importantly, I’m concerned with one part of Yahoo’s press release. It’s the statement that “quality of an ad will be determined by its historical performance in the new system”.

In other words, your pages’ performance can not be factored until part of the new Panama system. If you have a page that performs wonderfully for organic traffic, that performance is essentially irrelevant. Yahoo! then is basically telling us that performance cannot be factored when Panama launches, because 95% of the advertisers do not have access to the system. Translation: Yahoo! will then determine advertisement placement solely on price and what it sees as “its expected performance relative to other ads displayed”.

I’m really, really worried about this.

I’ve seen this happen with Google AdWords campaigns, and what tends to happen is that the PPC providers alienate their customers. As a paying customer, you’re once again stuck behind a thick veil of smoke and mirrors, making changes and constantly resubmitting ads and groups in the effort to decrease your costs and improve your quality.

The only opportunity Yahoo! has here, is to be more up front with their advertisers. Is the page lacking content? Does it contain too much content, a lack of detail or questionable content? Are you promoting affiliate offers too strong, or perhaps showcasing another system’s contextual advertising? These are the things that Yahoo needs to tell their users early and often to help win back advertisers.

If they don’t, it’s entirely possible that MSN’s adCenter could improve their system (currently being tweaked for improvements) and instantly one-up both Google and Yahoo! without much effort at all. The result would also result in an increased number of LiveSearch users — therefore leveling the playing field even more.

One thing’s for sure in all of this though… It’s a dynamic industry and one where the major players need to be concerned with advertiser’s needs. Other folks have ideas too on how Yahoo can differentiate themselves. Check out Panama Could Provide Google Antidote for a quick read if interested.