Yahoo hires first NZ employee to push Panama

Yahoo will hire its first employee in New Zealand to help promote the Internet giant's fresh push into the paid-search market.

Arch-rival Google has become synonymous with searching the Internet, especially in New Zealand, and its AdWords service is believed to have about 85 per cent of the global market for paid search advertisements, which researcher Frost & Sullivan estimates will be worth US$1 billion (NZ$1.28 billion) by 2010.

Businesses pay to have advertisements and links to their websites displayed on screen when Internet users search the web by typing keywords into search engines that are relevant to what they sell.

Yahoo last week stepped its efforts to grab its share of the spoils, launching a long-awaited system – Panama – that underpins its paid search service. Businesses can now pay Yahoo to have their advertisements displayed in one or more of 16 different regions in New Zealand, whereas they previously had to pay for advertisements whenever their chosen keywords were used by any computer user in New Zealand or Australia. Breaking down paid adverts by region should reduce the cost and wastage involved in paid search advertising, especially if businesses do not offer a nationwide service.

Craig Wax, YahooSearch Marketing's regional managing director for Australia, New Zealand and India, says Panama also lets Yahoo activate keywords for customers in minutes rather than days, making it possible for businesses to use paid searches to support short-term, time-sensitive sales campaigns.

Paid search results were previously ranked in an order that was entirely dependent on how much advertisers had paid for their advertisement. Placement will now also take into account how popular an advert has proved.

Mr Wax would not say how much revenue Yahoo was earning from New Zealand advertisers prior to Panama, but it is believed to be negligible. "We expect it to grow quite a bit because we have not put a lot of focus on it up to now, because without 'geo-targeting' we did not have as strong a value proposition as we have today," Mr Wax says. "We now have a much stronger value proposition for New Zealand."

Panama can display up to 20 different advertisements for each customer and detect how popular each is, based on how many people click on each advert. It can then learn from this, displaying the more successful advertisements with greater frequency to reflect their higher "click-through" rates. "There is no question that search marketing is becoming increasingly complex and that requires a higher level of sophistication," Mr Wax says. "But at the same time, what we have done with this new system is we have built in some functionality that takes a lot of that analysis off the shoulders of the advertiser and lets the system do it.

"Larger advertisers are able to go in and set specific parameters or business goals they want to achieve around click-through rates, cost per acquisition and return on their ad spend, and then they can prioritise each of those and put in targets. "Then our system will optimise against those parameters in an automated fashion, based on the instructions they provide."

Google spokesman Rob Shilkin says Google also lets New Zealand advertisers target paid-search adverts by 16 different regions, and offers all the other features provided by Panama.