Posted by: montegroup | April 21, 2008

Yahoo Search Gets Rid of Minimun Bids

Just this past Friday Yahoo Search announced that it no longer has minimum bid restrictions of $0.10. This means that you may see some savings in the less competitive keywords with low search volumes, but given the high CPC rates this move may not benefit all that much all the big advertisers – but I again I stand to be corrected if you think you’ll see big savings in your campaign let me know.

I still remember the good old days when Overture had a min. bid of only $0.05 and FindWhat was only $0.01.

The source of this minimum bid change from Yahoo is probably driven by their new bid structure, which reflects that of an auction house that may set a reserve price.

There are multiple factors that will determine the new reserve price; two key ones are the keyword value and keyword quality.

Keyword Value – this is determined by the amount of advertisers bidding for the keyword and how much they’re willing to pay.

Keyword Quality – this looks at your overall clicks for a particular keyword as compared to the competition.

Overall I think us as advertisers will just end up paying more for keywords as with this change your keywords now must meet the minimum bid AKA reserve price for your keywords to become active.

Google has a similar program, nothing new…Yahoo is just trying to standardize the SEM world marketers, trying to reflect that of Adwords.

Thoughts on this? Please share.

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