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!