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Yahoo’s Latest Brilliant Scheme to Make More Money: Arbitrarily Raise Minimum Bids

Published: July 9, 2008

Author: David Rodnitzky

‘Nothing Personal…but I got to Pay Paul.’

In the last 48 hours, I’ve gotten messages from two separate clients who have received the following ominous email from Yahoo Search Marketing:

Dear Advertiser
Minimum bid requirements have increased for ‘[Client Name]’
[Account Number]. Some of your active Sponsored Search keywords will soon
become inactive. Review bids now.
For more information regarding this alert, please log into your account
at https://login.marketingsolutions.yahoo.com/en_US and click the “View
All” link in the Alerts panel. For additional help, please visit our
Help Center at http://help.yahoo.com/l/us/yahoo/ysm/sps.
Your Partners at Yahoo! Search Marketing

Faced with a shareholder revolt, a mass employee exodus, and the continual decline in market share for paid search, it looks like Yahoo has decided that the only way to keep revenues up is to keep ratcheting up minimum bids. Short term, I suspect this will work – this is the kind of “laziness tax” that goes unnoticed by less sophisticated advertisers, who aren’t aware that they are being nickeled and dimed here and there.
Long term, however, this is yet another sign of desperation, one which will likely push more and more sophisticated advertisers away from YSM, as they are minimum-bidded out of an ROI-positive CPC range.

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