Yahoo Is Going to Automatically Optimize Your PPC Account Without You

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I received an email this weekend from Yahoo saying that they were updating their Terms & Conditions for their search marketing accounts. However, within the email they didn’t say exactly what was updated, so I went ahead and asked my Yahoo Representative for a quick summary of what has been changed (side note, my Yahoo Representative is great: he always has speedy, thorough email responses). In summary, Yahoo is going to optimize your PPC account without prior knowledge of or approval by advertisers.
The one major change that is important to Yahoo advertisers is listed under the “Sponsored Search and Content Match Program Terms” section and is copied below:

OPTIMIZATION. In the U.S. only, for those advertisers not bound by an Insertion Order, we may help you optimize your account(s). Accordingly, you expressly agree that we may also: (i) create ads, (ii) add and/or remove keywords, and/or (iii) optimize your account(s). We will notify you via email of such changes made to your account(s), and can also include a spreadsheet of such changes upon your written request. If you would like any of such changes reversed, please reply to such email within 14 days of the change(s), and we will make commercially reasonable efforts to reverse the change(s) you specifically identify. Notwithstanding the foregoing, you remain responsible for all changes made to your account(s), including all click charges incurred prior to any reversions being made. It is your responsibility to monitor your account(s) and to ensure that your account settings are consistent with your business objectives.

According to my Yahoo representative: “essentially, this means that Yahoo! will automatically go into an account and optimize the ads and keywords in the account without prior knowledge of or approval by advertisers. This program is designed to help optimize your account to its fullest potential. We optimize accounts on a daily basis and are in tune with dynamic changes in the marketplace, and know the tactics and strategies that have proven successful on the Yahoo! network. Any changes we make to your account will be very carefully selected, and are designed to help you become a more successful advertiser with Sponsored Search.”

Accounts are automatically opted into this program as long as they are on prepay terms (no invoiced accounts bound by an Insertion Order will be opted into this program). Accounts can be opted out of this program. To do this, Yahoo needs this requested in writing. You can send the email requesting to be opted out of the automatic optimization program directly to your Yahoo Customer Representative. Since this is done on an account by account basis, it is important that you call out whether you want specific accounts (list the account name and number) opted out or all of your accounts opted out.

If you don’t want Yahoo to automatically optimize your PPC account, you will have to submit this in writing.

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  • http://www.portentinteractive.com michaelportent

    Wow, AdWords is fast becoming the only useful and safe tool in the industry. (Although their Auto-Matching opt-in was rather dubious.)

    Yahoo, by doing this, is essentially saying that they can do my job better than me. Not only is it insulting, but no matter how carefully they pick their changes, they have no idea of the client’s expectations.

    We spend hours trying to not only manage these accounts as PPC experts, but also understanding the industry dynamics and the competition we’re up against. I’m sorry, but the Yahoo optimizers can’t have time to gather that level of knowledge necessary to optimize my clients for me.

    Even if it takes writing, I will be, and I’d advise all other ppc experts to opt out of this immediately.

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  • http://procaresoftware.com Phil EH

    I just spoke with our Yahoo rep. to see what we need to do to opt out of this automatic “account optimization”. I was told that if my account is selected for this service I’ll have 14 days during which I can call to opt out (in other words I can request they reverse their automated changes). So I asked isn’t their a way to opt out ahead of time since I’m telling you right now I don’t want this. The answer was no, they don’t have a way to opt out until it actually happens to your account. My response was they should definately allow you to opt out by noting it on our accounts. I was told it was noted and given a reference number but that will not prevent our account from being automatically optimized if we are chosen.

    It makes no sense that they can automatically take control of our ads. What other business could do that? If you placed an ad in a traditional print media (newspaper, magazine) could you imagine your rep. telling you they would decide how your add would look and what it would say because they were going to “optimize” it for you?

  • http://www.pcchero.com Joe

    Michael and Phil: I feel your pain! Yes, it would make MUCH more sense if this service were an opt-in, rather than an opt-out. Phil, thanks for the follow up. This is helpful information. Let’s keep a close eye on this as it develops.

  • http://www.roirevolution.com/blog Mark

    Thanks Joe! Awesome post.

    Perhaps a better idea would be for them to build an offline editor (like AdWords Editor) so the rest of the world can optimize in Yahoo! efficiently. I would imagine that would be a cheaper alternative than opening, training and supporting a department full of workers to override and nullify our carefully calculated changes.

    Strange stuff indeed.

  • Jeff O

    Enough already! This multi-million-dollar-spending advertiser is nearly tapped for patience and reason. Every move Yahoo, Google or MSN makes is for their OWN good, not yours or mine. Say it out loud. A search engine cannot claim to optimize your spend and your competitor’s spend without screwing one of you or both (and believe me the system is set up to screw you both), all for the gain of themselves, which they believe in preserving at all cost.

    Enough already! Do NOT wait around in typical SEMoron fashion waiting for the other shoe to drop on you. These are end times for Google and Yahoo, and desperate times call for desperate measures. Yahoo usurping its own advertisers’ optimization choices is simply the boldest, most crooked tactic to blind advertisers to actual costs that I’ve seen to date, and the fact they have the balls to do it in this way (facts obscured, no real detail in the new agreement, WRITTEN notice to opt out -WTF?) shines a light on the very real fact that Yahoo, as well as Google, is at the end of real search growth and can no longer sustain the rediculous dollar value they posess (most of which is based on wild assumptions that things will continue to grow as they grew during the early days of PPC – which they can’t). Because there is no more real traffic to get, no better conversion above 1-2% for most advertisers, these companies will resort to anything in order to maintain the illusion that their business models are “win/win” for the advertiser, all while taking more and more for themselves.

    Enough already! Take up arms, take your dollars elsewhere, take out a yellow pages ad for crying out loud because SEM firms, small businesses like mine and the vast network of entrepenureal members that have made Yahoo and Google a success are getting HOSED by B.S. on-the-fly policies like the one described here. Don’t believe me? Wait till 4th quarter of this year, you’ll spend like you’ve never spent before with your buddies at Yahoo and Google in full charge of your spend.

    Yahoo and Google can only foul their nests to a point before the law of deminishing returns drives their traditional advertising base away and into other channels. As much as it pains me to see things change this way, I’m afraid it is inevitable. If you don’t want to see things deteriorate any further, take action. Call your Google account rep and talk to his manager’s manager’s manager, and then tell that guy how rediculous this whole game has become. Demand better, these companies owe US their success, not the other way around.

    Enough already!

  • http://www.netmeg.org Netmeg

    I sent them notifications on my accounts that we don’t want them to make any changes to our accounts. If they do not let us opt out ahead of time, then I will take all my clients out of Yahoo and move the budgets over to Google. End of story.

  • http://paidsearchmarketer.wordpress.com Jeff James

    A few points:

    a) Mark, you’re right – if they had a reliable offline editor advertisers would be able to be much more effective.

    b) I don’t know if this will be a bad thing, but in the event that the advertiser is relying on 3rd party analytics to monitor and optimize their account, there’s no way that Yahoo! can make fully logical changes in the best interest of the advertiser.

    With that said, it may be benign but this catch all term is somewhat troubling:

    and/or (iii) optimize your account(s)

    could be problematic.

    Good find,

    Jeff

  • JB

    I see this and Google’s Automatic Matching as ways that Yahoo and Google are trying to help their average, stupid advertisers. This may actually work for them, but it comes at the expense of smarter and more sophisticated advertisers.

    Short-term padding to the bottom line that hurts and angers your best customers does not seem like a good long-term strategy.

  • http://www.pcchero.com Joe

    Well, I’m gonna say that the overwhelming response is negative to this discovery! Anyway, we may have a solution for you guys so please stay tuned. We’re gonna try to post some additional information today or tomorrow!

  • http://www.palatnikfactor.com Pablo Palatnik

    I can see why this would offend MANY advertisers, especially those who handle client accounts that now the client thinks they can just probably have Yahoo do the work for them.

    Either way, I was offered this as a Beta test I believe about 6 months ago or longer and it took them a RIDICOLUS amount of time to get the campaign back to me by excel and I had to approve it.

    I don’t see anything wrong with Yahoo saying, “hey, we think your campaign can perform better and let us show you what we can do” but that should be the end of it.

    They shouldnt bound advertisers by any terms & conditions and bs corporate crap.

    I see a blog post coming out of this for me =).

  • http://www.ppc-advice.com Garry Przyklenk

    Good call on this one, I had thought the issue to be isolated and didn’t think much of it until you pointed it out. Luckily I don’t have many Yahoo accounts under management or this could have been a really big problem. This won’t be good for agency confidence, that’s for sure.

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  • J N Gross

    Google actually filed for a patent on this concept, you can see all the gory “optimization” details as well at:

    http://appft1.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PG01&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.html&r=1&f=G&l=50&s1=%2220080065620%22.PGNR.&OS=DN/20080065620&RS=DN/20080065620

    Yahoo just seems to be copying this concept.

  • http://www.ecommerce-blog.org Jestep

    We’ve had Yahoo “Optimize” our account several times. Each time ended up with a high CTR and a much-lower conversion rate. Add that to about 10 cease and desist letters each time for trademark violations, and I would stay far away from Yahoo’s optimization service. The only one that will benefit from this is Yahoo.

  • Shellybelle

    Hey, maybe do a better job of setting up your accounts? How ’bout that? Or try to find a nice balance between CTR and conversion. What a thought.

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  • http://www.bluehost-info.com Russ

    What a joke. You have got to be kidding. How could Yahoo know how to write ads for every industry possible. That is ridiculous. Should be Opt-In instead of Opt-Out

  • http://nayak-nayak.blogspot.com/ pravakar

    I don’t think it will give good result for big business owner.

  • http://100leads.org/ Matt Smithson

    I must say I am rather shocked by yahoo’s “optimization” enforcement. I agree with Michael and Joe. This certainly should be a choice of the network running the account. Optimizing without consent will certainly lead to more problems than benefits. The option surely needs to be an opt-in, and this sets a dangerous precedent for other search engines. If this catches fire we might be looking at the “health-care” bill of search engine marketing, with feverish debate from both sides.