On February 26 2008, Yahoo! Blog had reported that Yahoo! is changing the minimum fixed bids for Sponsored Searches in the keyword market. Yahoo! will calculate a variable minimum bid for some of the keywords that the advertisers will bid on, which at times can bring the minimum bid lower than 10 cents and at times it may be higher as well. However, Content Match minimum bids will stay at 10 cents till further notice. These proposed changes will start from next week and would be rolled out in phases.
Let me just simplify the concept of minimum bids to keep things in perspective. Minimum bids can be based on multiple factors, including the quality of the keyword and its value.
Quality: When focus is on quality, it means that the advertisements of an advertiser are being clicked more often, compared to his competitors. Which further translates into higher rankings and lower costs.
Value: It is quite complicated to figure out the value of a keyword. However, Yahoo! will take in to consideration as to how many advertisers are bidding on the user's keyword and what theyÃ¢â‚¬â„¢re willing to pay for it.
A keyword term becomes active in the system and eligible for display, when the advertiser's bid is equal to or greater than the minimum bid. The user will be notified via an alert on his 'Account Dashboard' if his bid is about to drop below his stated minimum bid. He'll have a grace period of up to a few days to raise his bid to keep his keyword active.
A lot of best practices in search marketing are also very essential for an advertiser to manage his minimum bid:
- Know the keyword and its value: An advertiser should be aware of the keywords that have the highest potential as variable minimum bids may be set for each of his keywords.
- Ad Quality: Enhanced advertisement quality results in lower minimum bids. The quality of an advertisement also has direct impact on the advertiser's PPC campaign and the ad's relevancy and position in search results.
- Update the Account Interface: Yahoo! will also be releasing updates for advertisers' Account Interface to help them make their bids easier to manage. These updates include a new search and management tool that will allow the advertiser to find keywords that are below the minimum bid.