Yahoo Panama Removing Fixed Minimum CPC

Yahoo Search Marketing Blog announced the Minimum CPC for keywords will no longer be fixed close to the end of February 2008.

Starting in the next several weeks, the minimum bids for a number of Sponsored Search keywords will no longer be fixed at $.10. Your new minimum bids can be lower or higher than $.10. Content Match minimum bids currently will remain at $.10.

The amount set as your minimum bid on a keyword in Sponsored Search can vary depending on multiple factors, such as:

The relevance of your keywords (as measured by the quality of the ads associated with them)

The number of bidders and bid amounts in the particular keyword market.

The changes are starting any time from now to the next several weeks, and below is what you will need to watch out for:

Since the minimum CPC of certain keywords will automatically be increased by the Yahoo Panama system due to low relevance, you should start double-checking the maximum CPC of your keywords across your account to ensure they are active for search.
If the new minimum bids are higher than your expectations, improve the ad quality by making changes to your text ads.
Set separate keyword maximum CPC for your content-targeted campaigns and for your search-targeted campaigns.

Yahoo Search Marketing first introduced the quality-based pricing in the middle of 2007, but only until now this technology is reflected on keyword minimum CPC. I believe one of the reasons is to reduce the frequency of regularly refunding to advertisers due to low quality clicks received.

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