Occasionally, I will submit stories about web design, search engine optimization, and sponsored search because I feel that it critical in small business technology.
I received notice this morning that Yahoo is going to cut costs for clicks from lesser known web sites. In other words, less pay for web sites that are not as popular. As an advertiser, I appreciate any price cut to stretch the budget a bit further. As a publisher this move is confusing. Obviously if you are generating less traffic then you will get paid less overall anyways. Is this a push to get advertisers to feature Yahoo advertising more prominently on a web page?
This is the key paragraph in the email that they sent this morning-
With quality-based pricing, you may be charged less for certain clicks than you otherwise would pay, depending on the overall quality of the traffic source the web site your ad appears on.
What is quality? It seems to be based on conversion, the ratio of clicks to site visitors.
I do know one thing. Google started this trend of non-transparency in paid search engine sponsorship. Yahoo jumped on the band wagon earlier this year when they saw Google’s success with the methodology. At one time, you simply had a matrix of your keywords along with your current highest bid and the three highest bids for each word. It was easy to check it several times a day to position yourself in relationship to competitors. Those days are gone on the large engines such as Google and Yahoo. The smaller engines still offer this flexibility, but they also do not offer much in the way of traffic. If you want big traffic then you must play in Yahoo and/or Google’s sandbox. It is like that abusive childhood friend who had all the cool toys.
More information about Yahoo Quality Based Pricing. The Yahoo Quality Based Pricing FAQ.