Yahoo! Removes Minimum Bid on Keywords

In late February, Yahoo! announced they will be removing the minimum $0.10 bid price for keywords in their Sponsored Search program. It has taken a while but these changes are going to start next week and will be gradually rolled out.

This brings the keyword auction model in line with Google who have no set minimum amount for their keywords and price them based on quality and popularity.

In case you missed the Yahoo! post, the minimum bid prices will now be determined by two factors, quality and value.

Quality - High quality ads get clicked on more often and indicate that searchers are finding what they are looking for. Yahoo! tries to reward high quality ads with higher rankings, and now, lower minimum bids.

Value - Value can be determined by a number of factors including popularity and what others are willing to pay for a certain keyword. The more popular keywords will generally attract a higher minimum bid.

While the removal of minimum bid prices sounds like a good thing to most advertisers, it may result in some keywords becoming more popular and increasing their minimum bid. Those participating in the Yahoo! program should keep a close eye on their keywords over the coming week to ensure they all remain active.

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