How Yahoo’s New Minimum Bid Affects You

Posted on | May 9, 2008 | Comments Off

The popular search engine Yahoo has new policies regarding the minimum bid on their pay-per-click listings. In the past, Yahoo’s minimum bid was uniformly ten cents, but it now varies depending upon the keyword and other factors. There are some steps advertisers can take to potentially qualify for lower minimum bids on their keywords of choice.

According to a message posted on the Yahoo Search Marketing blog in mid-April, the new minimum bidding amounts are based upon the “quality” of the advertisement and the “value” of the keyword. It explains that “quality” refers to a higher click-through rate; thus, if your link is clicked more frequently than other ads under the same keyword, it might be assigned a lower min. bid. Apparently this is aimed at improving the relevance of Yahoo’s sponsored results to what people are searching for.

As for the “value” of the keyword, the Yahoo blog post indicates that more than one factor affects this calculation, including the number of promoters who have bid on it and how high their bids are. It also states that advertisers will be provided with a “grace period” to update their bids if a new min. bid surpasses their current bids. To keep the minimum low, a separate message on the same blog recommends creating more attractive ads, monitoring each ad’s performance, and bidding on keywords which are relevant to the advertisement.

An image on Yahoo’s blog shows that minimum bidding information on specific keywords can be viewed on the “Keywords” page under “Campaigns” when you are logged into a Yahoo Marketing Solutions account. The “Status” column shows whether or not each keyword meets its particular min. bid; if not, it reads “Inactive, Bid Too Low” in red text and indicates the new min. amount on the next line. If it reads “Pending Inactive”, this means that the “grace period” is still in effect.

So how does the new minimum bid affect you? If you advertise using pay-per-click sponsored search ads on Yahoo Search Marketing, the minimum bids you have to pay may increase or decrease. It only affects Yahoo advertisers using this type of promotion; the minimum bid for Content Match ads will stay the same. If you only use Yahoo for searching, this affects what sort of sponsored listings you will see at the top of result pages.

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