Posted February 28, 2008 6:48 pm by with 16 comments

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Yahoo is changing the way they set minimum bids on paid search. Over the next few weeks they will set the minimum bid based on quality and value rather than how much you pay. The minimum bids will be set by individual keyword.

Yahoo describes the change like setting minimum bids in an auction. So the more valuable, high quality, or demand there is the higher the starting bidding price is.

Previously the minimum bid never fell below 10¢ but with this change you could pay less per click. On the Content Match (your ad showing on web sites instead of with search results) minimum bids will remain at 10¢.

Here’s a breakdown of the factors Yahoo will use to determine minimum bids:

  • Value – the number of advertisers bidding on your keyword, and what they’re willing to pay for it.
  • Quality – the relevance of keywords, or how frequently users click on the ads compared to competing ads. The better your ad performs the less you’ll pay per click.

If an advertiser’s bid meets the minimum bid for their keyword then the ads are eligible to be displayed for that keyword. If a bid falls below the minimum then the keyword the ad won’t show. The advertiser will be notified and they can then change their minimum bid.

They’ve also introduced a new search and management tool so advertisers an find keywords that are below the minimum bid and therefore not actively running. Yahoo assures advertisers that most minimum bids won’t vary dramatically over time as long as ads don’t drop in quality.

  • This is amazing news. I know they did this because Google has been criticized for raising their rates recently.

  • The PPC price is very low now. i use google before.

  • I am very intrigued now that the service is cheaper. Craig, you are right…Google raised prices.

  • May be this is because of recent changes in stuff.

  • That is great news but what I would prefer to see is the removal of the way them make you top up with a credit card even before your monthly funds are spent.

    I used a free £75 voucher and put in £75 of my own money. When the voucher was down to about £15 left, I was asked to deposit the same sum again.

  • I will try Yahoo in action. I used only Google before.

  • I tried using Yahoo search marketing for over 2 months with less than expected results. All I got was 2 clicks despite raising my cost per click. It was so disappointing, have stuck to Adwords since.

  • Words that check in below 10 cents on Yahoo search marketing will probably be very obscure.

  • It will be interesting to see how high the bids go for the most demanded words in a relative mrkt.

  • I’m now curious to know on a relative basis for a given keyword how much cheaper Yahoo will be than Google.

  • Looks like a marketing avenue just became cheaper. Hopefully someone can provide feedback as to the savings between similar words, and if their traffic increased or decreased.

  • They might as well monetize not so popular categories. I guess more competitive keywords will not be effected.

  • This sounds like great news for the people who promote questionable offers with extreme long-tail keywords. Before, they had to pay at least .10 to send someone off to their ringtone/zip code submit/win a free gift card offer, which meant they had to convert at a pretty high rate to make money. If the bids come down to .05 or less for some of those keywords, a lot of campaigns that might not have worked before will be feasible. I’m not crazy about that part, but I’ll definitely enjoy my cheap clicks wherever I can get them.

  • Sab

    Six months ago I tried using Yahoo search marketing for over 3 full months but the results were…
    Now I’m curious,i ‘ll try it, but I believe Adwords is more competittive.

  • Pingback: Yahoo is Changing Minimum Bids for Sponsored Search Ads | Live Crunch()

  • Great changes, I am using SM as well, pretty low bids and nice sales.

    Alex’s last blog post..Keyword Elite – Is Keyword Elite The Best Keyword Research Tool ?