Yahoo Search Marketing takes a page from the AdWords book

Yahoo Search Marketing, the pay-per-click arm of Yahoo advertising, is making changes that more closely resemble the Google AdWords pricing philosophy. Yahoo has required minimum bids on both the sponsored search and the content match networks be a minimum of $.10 per click. Starting soon, Yahoo will move to more of an AdWords quality score rating system that will impact the minimum bids required on the sponsored search network.Content match bids will remain fixed at a minimum bid of $.10, but the Yahoo sponsored search minimum bids will fluctuate based on a number of factors. A unique twist on the pricing structure will gauge the value of any particular keyword bid based on the number of bidders and the actual amounts of the bids on the keyword.  This could result in either an increase or a decrease on the minimum bid required to keep your keywords active.

Yahoo is also implementing an ad and keyword quality score which will determine the relevance of your keywords to your ad and landing page, not unlike Google Adwords. Unlike AdWords, however, Yahoo says the minimum bids will not be influenced by ad conversion rates.

As an example of how the new sponsored search bid pricing will work, if you are bidding on a highly competitive keyword, all things being equal, you will be required to increase your bid amount in order to keep your ad active in your campaign. The implementation of an ad quality score puts Yahoo on par with AdWords ad optimization requirements, and I would think it would make running campaigns on Google and Yahoo easier to implement and compare.

Will this change result in higher advertising costs for advertising on Yahoo? I would venture to say probably not.  If you maintained lower bids on a keyword, chances are your CTR was equally as low. With the new pricing structure, if the keyword is competitive, your minimum bid may rise, but CTR across all advertisers should remain constant. If your keywords, ad text and landing page are optimized as they should be, you may actually end up paying less than before for an equal or higher CTR.

In reality, we all knew this change would come at some point. As Google leads, Yahoo follows. My only problem with this change is Yahoo’s reluctance to lower the content match minimum bids. I would venture to say that 90% of campaigns generate a higher CTR and conversion on the sponsored search listings, so why require advertisers to potentially pay more for clicks in the content network? My guess would be changes to the content match pricing structure will be coming in the near future as Yahoo seeks to make up for lost market share.  Time will tell.

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