All I can say is that Yahoo just lost my $3,600/month spend by jacking up my rates 3x overnight. This is a lot like letting Obama run the country. A really bad idea.

Yahoo —- don’t perceive yourself as being “smart”. You will be as good as gone by 2012. Screw the customer, and they will screw you. Works every time.

I was referring specifically to “broad match” keywords. The ROI is way better in Yahoo for Broad Match vs Google.

I kinda feel like Google forces you to use all of the matching techniques with different bids for each. Yahoo simply does a better job of matching keywords to actual searches.

It took me a little while to realize how off-the-wall Google’s matches can sometimes be, and not my campaigns are optimized better.

And yeah, my content matching is turned off. That can be a bit tricky as well at first. Both Google and Yahoo default their ads on Content, so you have to be vigilant in turning them off. Thanks for the response.

I’m making a guess here, but i believe i will ultimately stop spending money on YSM altogether after this change takes place.

What is happening? YSM seems to be punishing the small businesses and slowly weening them out. Some “strategy guy” came on board and convinced corporate that they need to make ads all about the “customer experience.” What they forgot is that we, the advertisers paying for the ads are the customers. I agree that natural search should be about the customer experience and that is where the philosophy should have been applied.

America was built by entrepreneurs that started out as small business. In fact (stats may have changed) 90% of the US workforce comes from small business with a mere 10% coming from corporate. So if we want to fuel the economy and have these small businesses grow into large clients, this is the sector that i would focus on to improve customer experience. It is unfortunate, but i believe that Yahoo will see a large decline in revenues due to these changes.

-JB

This is a great move for a lot of reasons.

I worked on the team that implemented these at Google and it’s interesting that a lot of what you say is the same sort of stuff advertisers say when looking at minimum bids on Google. Yahoo is going to have a lot of messaging issues on their hands very shortly after this launch

It sounds like Yahoo is just mirroring what Google has done in the past to improve Yahoo’s monetization. There are macro level effects in the marketplace that make this strategy make sense as well aside from the quality win they’re trying to achieve — for example, if advertisers optimize their campaigns for Google and then dump in keywords into Yahoo, it may make sense to just mimic what Google does to maximize advertiser return on Yahoo’s network.

The key point of confusion most people have is the dynamic between minbids and the real time auction.
So for example, when you state “Conversely, the advertisers with the highest click through rates will now be in a position to buy up keywords below the point where lesser advertisers even hit their minimum bid.”

This probably isn’t true. It all depends on how aggressive the bucketing is that Yahoo is going to do. Chances are Yahoo is just driving up minbids for scummy advertisers, so they probably won’t alter the mix of ads that are eligible to show up in the auction, so the auction itself in most cases will remain unchanged.

Minimum bids and real time auctions in online advertising are very different things. The real time auction is designed to reward high quality advertisers willing to pay a lot per click and the dynamics of that market place are in a lot of ways independent of the min bid system. The min bid system is designed as an economic disincentive beyond the auction to weed out scummy ads in particular. So if you have a lot of guys bidding right at $0.10 those may be ads that you don’t want to show at all because they’re low quality, and that decision is relatively independent of the market dynamics of the auction.

The critical thing to understand here is that in search advertising there is a long term sustainable advantage if you can drive relevance. Google has long been obsessed with advertising quality — NOT revenue — and so you see they have entered a virtuous cycle of having the most targeted ads, which drive the best conversions for advertisers, having users trusting their ads more, making them more likely to click on ads which then drives higher total conversions to advertisers. This in the long term drives better monetization and higher revenue.

It’s shocking to some people but doing the right thing here for your user actually does make you the most money. Yahoo is starting to mimic this, both with their Panama launch and with this minbid launch.

So if you work under the assumption that relevance is a good thing, you can consider this a Yahoo relevance launch. They’re modifying the incentive structure for advertisers who have low quality ads so that low quality ads have an economic dis-incentive that keeps them from participating in the auction entirely or from showing up on queries that don’t monetize well at all.

You really have to consider the real time auction and the minbid as two separate pieces that interact but have different goals. Looking at it that way then the impact on the auction itself should be minimal but the impact on quality could be substantial.

-Avichal

http://www.feedjournal.com/pap.....sprint.pdf

Harry “fuzzy memory, that one is” Wang

I imagine Yahoo has something similar going on and think will help Yahoo. The ineffective ads will be filtered out increasing conversion rates improving user experience. I imagine the trend for improvement in revenue will be similar to what Yahoo saw when they moved from ad ranking based on bid alone to one based on quality score.

Rajesh

Kind of like the middle class & low class paying more for taxes & the upper class paying less. Bigger sites, already have a large traffic base, & if they buy up keywords that a smaller site needs, they are being pushed out.

Sites using Yahoo advertising will be separated quickly into class structures. Maybe it’s the right thing to do, but it’s only right w/ completely separate models for each class — Higher Trafficked Sites Vs. the Lower Volume Site, etc.

I love Yahoo Search Advertising. The volume isn’t as big (maybe half for us), but the ROI is WAY better than google’s on broad match terms.

I think this has a lot to do with exactly what triggers ads in each network. Google Adwords uses this example for their matching. If your keyword is “tennis shoes”, then a search of “tennis shoes” will trigger an exact match of your keyword. A search of “red tennis shoes” will trigger a phrase match. And a search of “red sneakers” will trigger broad match.

But I think that is a little misleading. Sometimes it seems like what they really mean is: A search of “red foot fetish” will trigger broad match. Feet are somewhat related to Tennis Shoes, right?

But with Yahoo, your ads are only triggered by very similar keyword searches. So it consistently performs better.

And if you’re not super careful, you can waste a lot of money in Adwords.

I’ve cross posted at: (http://adecon101.blogspot.com/2008/04/news-yahoo-tweaks-its-advertising.html)

This results on more clicks on higher paying ads, better user experience (less distraction), and generally more revenue.

Google is obviously reaching the end of this approach on its US site, so it’s not full of unlimited potential.