 |
Yahoo Reserve Market Price Killed My CampaignPosted by Joe on July 11, 2008 in Uncategorized |
Back in February, Yahoo announced that they would be instituting a reserve market price for their keywords. Basically, this means they now have minimum bid standards for their keywords. This seems like a reasonable tactic to employ to ensure the quality of advertising within their paid listings. For the most part, this new system hadn’t seriously affected our campaigns until yesterday when many of my “main” keywords for one of my clients were increased by approximately 400%.
When I received the notice of this change I called my Yahoo Representative (whom I like very much). He said reserve pricing will help block out lesser-quality advertisers by increasing bids so much that it will not be viable for them to target irrelevant keywords. With this change, I told him that they also out-priced my client, who is EXTREMELY relevant for these now over-priced terms.
We chatted for a while longer and the only solution we could conjure was to work on my quality score. I told him that the quality index for all my ads were extremely high (4 or higher). So, basically, he said that I’m stuck with these new keyword prices. My response: not necessarily, because I can shift my PPC spend elsewhere.
With the quality index program that Yahoo has in place now, reserve pricing should have nothing to do with advertiser quality (as I was told). This has everything to do with squeezing more cash out of advertisers. Yahoo said it best on their blog:
While figuring out the value of a keyword can be complicated, we may look at a number of things to determine what it’s worth: for example, how many advertisers are bidding on your keyword, and what they’re willing to pay for it.
This means that they determine how much advertisers will pay, and then stick it to you. Yahoo says that they will reward advertisers for quality campaigns. I have seen this in affect in a few campaigns with minimal decreases on my CPCs. However, these would have to be some serious rewards in order to make this campaign viable for me again. I know that this campaign is of high quality and I’m still getting stuck with these outrageous CPCs. Basically, decrease my CPCs would have to go back to where they were to begin with.
I like Yahoo. I like rooting for the underdog. But sometimes they make it difficult. However, this doesn’t mean I’m going to throw in the towel right away, but they have me against the ropes. Has Yahoo’s reserve market price affected your campaigns? Let me know!
July 11th, 2008 at 1:31 pm
I am also getting hit hard today.
I work with small, local businesses constantly trying to convince them that them interwebs are not the big scary nothing that they are convinced it is.
Today most of them were priced out of their targets, even with geo-targeting in place.
This change seems to be particularly hard on the small locals.
July 11th, 2008 at 2:58 pm
Same thing happened to us…and it happened to a client that is spending $40K+/mo with them. This client said he will gladly take that away from Yahoo! on Aug 1…we’ll see if he will follow through. Yahoo! definitely screwed the pooch with this change. Not good at all…not good in any way.
July 13th, 2008 at 4:45 pm
It hit automotive last month and prices immediately spiked on all of my clients brand terms. Then after about a week the prices went back down to previous levels. So I’d say watch your AVG CPC and see where it goes. All that being said it ruined my month and if the prices go up to those levels again, I’m moving my budget elsewhere.
Several of our lesser performing keywords went inactive because our bids weren’t high enough and we are going to leave them that way.
July 14th, 2008 at 12:36 am
I had the same thing happen across multiple niches. It is a pretty common thread in all the affiliate marketing forums as well.
I think it is crazy that they try to claim this change is intended to improve ‘quality’.
July 15th, 2008 at 10:28 am
[...] http://www.ppchero.com/yahoo-reserve-market-price-killed-my-campaign/ [...]
July 17th, 2008 at 6:14 am
Hi everyone. Thanks for the comments, and I’m sorry to hear that everyone is having similar problems. I agree, I think their point-of-view that this will improve advertiser quality is a bit skewed. This is a bad situation, but there has been a few positives to come from it: this will inspire me to continue my keyword research and hunt for those long tail terms to help bring down my overall CPC, and this will inspire me to continually improve my account in order to increase my ad quality index.