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Yahoo Search Marketing Pay Per Click Advertising Forum

Your Click Charges to be Based on Quality of Traffic
Quality-based pricing

 12:52 am on Jun 5, 2007 (gmt 0)

Hi there,

I wanted to give a heads up to our YSM advertisers – we’re starting to roll out quality-based pricing beginning June 4, 2007. Please note that this is a phased roll out over time.

What this means is that you (the advertiser) may be automatically charged less for certain clicks than you normally would pay, depending on the overall quality of the websites providing this traffic to you.

•Benefits to you: discounting, higher quality traffic and potentially better return on investment.

•Action you need to take: Quality-based pricing is automatic so there’s no action on your part.

•When discounts will be applied: Discounts may be applied to your click charges where warranted, at the time of the click only. [Keep in mind that amount of discounts may vary between advertisers. Some advertisers may experience a noticeable decrease in overall cost-per-click, while others may experience only a small decrease in spend.]

A partner’s quality is generally based upon our assessment of their ability to delivery quality traffic to you. Yahoo! takes multiple factors into account, such as conversion rate and other appropriate measures when assessing a partner’s quality.

As always if you have any questions feel free to post here or private message me.



 1:13 am on Jun 5, 2007 (gmt 0)

So this isn't going to affect our pricing on actual yahoo traffic, but only the "partners" huh? Smartpricing yahoo style?


 1:19 am on Jun 5, 2007 (gmt 0)

This does not really "fix" the problem with Overture cheating advertisers ...

Yahoo "syndicates" ***search*** ads to spyware publishers ... (this change only affects ***content*** publishers)

Yesterday I got a spyware popup that had yahoo sponsored results but thats not all ... each ad said "CLICK HERE" beside it ....

Reported to Yahoo ... nothing done .... second e-mail with ben edelman also cc'd ... then they do something ....


 1:33 am on Jun 5, 2007 (gmt 0)

I just got several emails from YSM announcing this.

First thoughts:

1) Is this a way for YSM to cutoff criticism and complaints? We spend a lot of time every month documenting fraud and we often get sizeable refunds. In the future, will YSM say: you're not getting a refund because the clicks from those crap sites have already been discounted. ?

2) I am willing to pay more than my normal bid for clicks from yahoo.com. And altavista.com and dogpile.com and a few others. The reason I keep the bid lower is because of the large percentage of clicks from parked domains and scammers who obviously buy clicks elsewhere in an arbitrage scheme. Now I have noticed that YSM has cleaned house somewhat in the past couple months, and I have increased bids. I wonder if this new system means more crap affiliates will be added.

3) When responding to our complaints, YSM often requests that we put their conversion code on our sites. We will not do this because the info is proprietary. (We would rather stop advertising on YSM than give them this info.) I think their request is actually sincere and their employees believe that some of these low quality sites are actually legit. (YSM employees seem very naive when it comes to believing in the quality of affiliates.) How does YSM know which sites are bad and how much they should discount? Because we're not putting conversion code on and I bet our competitors will not do so either.


 1:49 am on Jun 5, 2007 (gmt 0)

As an advertiser this is good news.

A question I have though, will this allow your click charges to fall below 10 cents for the content network?


 4:46 am on Jun 5, 2007 (gmt 0)

The biggest and best change was buried in the email YSM sent. It states that domain level exclusions are in the works and will be available soon. This is huge news! YSM will let us exclude particluar domains from sending us crappy traffic. I have been asking for this feature for years. Congrats YSM. This is a big step in the right direction!


 5:29 pm on Jun 5, 2007 (gmt 0)

98% of my dollars left Yahoo years ago.

As someone said, being able to 'exclude' these crooked 'partners' is in the works.

If that happens, meaning I have full control over which sites my ads appear on, then some of my money may come back.


Pure and simple, I want to advertise on Yahoo and nowhere else.

I want to advertise in the U.S. and nowhere else......Many small businesses don't ship items outside the U.S., so why should we be forced to pay for advertising elsewhere?

A couple of 'checkboxs' and some honesty from Overture/Yahoo in the past, and they wouldn't have lost many of their high dollar advertisers to begin with. (10K a month from me)

DISCOUNTING some crooked traffic from 'partners' isn't going to be enough......it's still crooked traffic and wasted money.


 6:50 pm on Jun 5, 2007 (gmt 0)

Some advertisers may experience a noticeable decrease in overall cost-per-click, while others may experience only a small decrease in spend.

What about increases?

If there is some true objective measure of traffic quality then it seems to that the comment should also state that some advertisers may experience noticeable increases.

Hope that makes sense.


 6:55 pm on Jun 5, 2007 (gmt 0)

First, they release this the announcement that they are discounting all of this horribly bogus traffic. Uh... we don't want it in the first place. Let us OPT OUT of all of the 3rd party adware/spyware junk and maybe we'll start using your sposored search solution again.

The partnership with Gator was the last straw for me.

Mark my words... the next step is to RAISE the price on the "quality traffic".

Yahoo search and Yahoo shgopping have time and time and time again shown they will murder long term potential for short term money grabs and I have seen no reason to believe that they will stop any time soon.

99% of my $ left Yahoo search years ago, and it doesn't look like it's going back any time soon.


 8:58 pm on Jun 5, 2007 (gmt 0)

short term money grabs

Read 'stockmarket'.

So what's new - most companies behanve this way when they are driven by share value for hedge funds, institutional investors etc.

IMHO - the quicker YSM bring in opt out and clean up some affiliates, and concentrate on long term partners that they vett closely and don't allow to simply add to however many other sites they own, the quicker they will start to make real gains over a longer period.

[edited by: TinkyWinky at 9:00 pm (utc) on June 5, 2007]


 9:11 pm on Jun 5, 2007 (gmt 0)

1) Is this a way for YSM to cutoff criticism and complaints?

Not really, IMO. Anything that can be done to obfuscate how much you pay and why you pay is ultimately bad for you. I sound like a broken record with that around here, but it's true.

2) I am willing to pay more than my normal bid for clicks from yahoo.com.

Exactly. So, as you pay less for discounted clicks while not knowing why or how, you will increase your max bid. After doing so, those variables in the black box will be changed as needed. Maybe in your favor, maybe not, but you won't know until you find that you've overspent and need to scale back.

Google is already moving in the direction of more disclosure. Anything that gives you less information is bad for you, because you have more guesswork to do, along with everyone else in the auction process. These ad/click sellers have the capability to provide way more information than they currently do. Look up "winner's curse" and understand it. "We'll charge you less" isn't such a great thing when "you'll know less" is part of the equation.


 9:48 pm on Jun 5, 2007 (gmt 0)

Charged less for poor quality traffic? How about not getting charged at all for poor quality traffic? Why in the world would I want to pay for junk traffic that does not convert?

Google is getting things right via pay per action. Smart pricing is not a good way to lure potentially new advertisers, pay per action is the way.


 9:58 pm on Jun 5, 2007 (gmt 0)

Hi there “aeiouy”,

I saw your question, “will this allow your click charges to fall below 10 cents for the content network?”

Although our current minimum bid is $.10, under quality-based pricing it is possible to pay less than ten cents for a particular click, depending on the quality of the traffic from where the click originated.

Hope this helps.



 11:57 pm on Jun 5, 2007 (gmt 0)

Thanks Pete. That is good to know.

As for those who said why charge at all for poor quality traffic, because it still potentially has value, just not value at full price.

If one site converts at 10% and another at 3%, if they cut the price you are paying, it still might be worthwhile to use the 3% traffic. You just don't want to pay the same price as the 10% traffic.


 12:03 am on Jun 6, 2007 (gmt 0)

Hi YahooPete

Is this change US only, or international (particularly interested in the UK market)?


 12:34 am on Jun 6, 2007 (gmt 0)

Google is getting things right via pay per action. Smart pricing is not a good way to lure potentially new advertisers, pay per action is the way.

Google isn't offering PPA for contextual advertising, and PPA isn't a practical substitute for for smart pricing, quality-based pricing, or--better yet--quality-based ad placement.


 12:53 am on Jun 6, 2007 (gmt 0)


I would not necessarily say that now. There are more publishers running ads now and we have had more conversions recently. Google is on the right track. This way we do not have to worry about "low quality" non converting traffic. Watch, this concept will take off before long.


 1:08 am on Jun 6, 2007 (gmt 0)

Is there any plan in the near (or far) future to allow advertisers to opt out of the search "network."

The lack of transparancy in this area is troubling.

I know that Yahoo obviosuly doesn't mind being associated with adware and spyware, however, I feel that it tarnishes my brand and makes my company look bad when my company name and ads show up in spyware pop-ups, and obtrusive adware applications (see Gator).

I understand the desire to increase shareholding earnings and all, but to me this completely cheapens the Yahoo sposored search platform. If I want to advertise on Yahoo, I've also got to advertise in spyware? Makes no sense to me.


 5:16 am on Jun 6, 2007 (gmt 0)

Hi Pete,

Thanks for the update. It seems advertisers aren't too happy with Yahoo's program based on these responses. I'd like to submit there are issues from the publisher side too.

Yahoo! takes multiple factors into account, such as conversion rate

Not very useful when your ads are so poorly targetted. I have categories set up. But ads from all kinds of unrelated nonsense. No one clicks the ads. No shock there. So I write Yahoo, please fix the targetting or check if everything is ok on my account. Yahoo responds (paraphrasing) that my account is fine and that ads are being targetted as designed. And they assume those "irrelevant" ads are showing up because the advertisers are bidding more.

Wonderful, but no one clicks the ads because they don't belong on my site. But if that's the design, of course I remove 99% of the ads that were up there.

So now Yahoo plans to penalize publishers for poor conversion? Well if the ads aren't targetted, the conversion won't be good. I don't think Yahoo has much good data right now. So I don't see how the quality controls will help, even if the system is well designed. You'd have to start from scratch. (assuming that others experienced the same problems I did...and I know they did because I've spoken to other pubs and read it all over the web).

Don't mean to put you on the spot, but if Yahoo doesn't address this concern somehow, then these initiatives won't convince us to try again.


 6:37 am on Jun 6, 2007 (gmt 0)

Be interesting to see how this affects the long time Overture/Goto search feed partners, a quality initiative is fine if the ads are good. If not though and earnings crumble many will surely move on after many years, they won't accept pennies for their clicks.


 7:28 am on Jun 6, 2007 (gmt 0)

pay per action is the way.

Watch, this concept will take off before long.

trinorthlighting, that's fine for you, that ppa works to your favor. which you already stated in several threads now.

but look, this is a market. participants are advertisers and publishers. the ppa concept is hyped by its cheerleaders since years, the end of cpc is near blabla. actually, ppa is an older concept which has proven to be comparably unsuccessful in terms of market penetration. fact is, that cpc prevails and is still going strong since all those years. what does google base their business on? what did it make the biggest online advertising company in the world? it's cpc. why? only with cpc you get a sufficient advertiser and publisher base. because the marketing risk is equally distributed so that both parties join the program in masses. do you honestly think that google would sacrifice their cash cow? that's your wishful thinking.

ppa is a nice product extension which works for some publishers, but for most it does not. it means total dependence on the advertisers' ability to convert quality traffic. in the end the network will be left with no adequate publisher base (= advertising space) because the payout is much too unsecure for them, more like a lottery. the once so efficient system would break down. cpc - in terms of risk distribution located right between cpa and cpm - is the only way to keep a robust advertising system for all participants. google, yahoo et al know that.

[edited by: moTi at 7:54 am (utc) on June 6, 2007]


 2:29 pm on Jun 6, 2007 (gmt 0)

We are a publisher in the YPN network, the network everyone here wants to opt out of. We produce quality sites and attract U.S.-based search engine traffic. The ads YPN feeds us, though, are often irrelevant to our content. Is this our fault? No. It is YPN's fault. This is why advertisers are getting poor conversions; the people clicking on our ads often have no interest in the sites to which they are being taken. Blame Yahoo, not the publishers.


 4:42 pm on Jun 6, 2007 (gmt 0)

PPA conversion information could be very useful to publishers and is something even yahoo should work on.

Think about it, your a publisher and you write about widgets. There are three sites that sell widgets on the internet and your povided with this infomation:

Site 1- has a 4% conversion rate
Site 2- has a 2% conversion rate
Site 3- has a .01% conversion rate

Would that help you in the choice of pay per action ads you would put on a site to help the advertiser make a sale and the publisher to cash in on a conversion?

Of course there are other factors, but if any advertising service could do a little estimation with conversion percentages and $$ paid for a conversion to the publisher, then you would have a choice that would make the publisher happy and the eCommerce site would be happy due to completed sales.

Take it one step further, the advertising service could update conversion %'s weekly due to seaonable changes once they have some history.

Big reason why PPA failed in the past, advertising service did not have conversion data and the publisher did not have conversion data as well. Times are changing though, its a race for the almighty advertising dollar and since internet advertising is growing, who ever gets it right first will see a huge influx of $$


 7:21 pm on Jun 6, 2007 (gmt 0)

Right, but if they don't show relevant ads, their conversion data is irrelevant. In fact, the problem w/ this whole smart pricing is not just an evaluation of the site, but of the ad provider's ability to provide context sensitive ads. Also, I believe even google should rotate their ads more often. Show the best paying ad first, but rotate them when the same user is on.

In fact, forums who get low conversion rates would benefit most from frequent rotation. I notice the same ads over and over on forums.


 2:35 am on Jun 7, 2007 (gmt 0)

As for those worried about targeting. I would suggest that the quality pricing will likely broaden the pool of advertisers, allowing for better targeted ads. I know I will likely be spending more money on the Yahoo! Content Network.

As for those trumpeting PPA, I just don't ever see PPA working well for most publishers in this kind of environment. Knowing how companies who market their products through PPA, since it is what I do for a living, I know that they don't care that much. They are looking for guaranteed returns.

It takes a lot of work to make most of them sellable, work that someone who just wants to cut-and-paste some javacode snippets on their webpage won't do. Not to mention targeting is so important in getting real conversions, that it ultimately is a tough battle giving the constraints of the marketplace.

Anyone who thinks that PPA is going to replace CPC contextual advertising is likely not fully aware of how PPA marketing works, and why it just is not going to translate well enough to usurp the CPC model.


 10:55 am on Jun 7, 2007 (gmt 0)

Has anyone seen a change in your spend (as an advertiser) since Yahoo has launched this new pricing model?

If so, what trends do you see?


 6:33 pm on Jun 7, 2007 (gmt 0)

Hi davec,

Thanks for your feedback.

Currently, quality-based pricing is being launched in the U.S. market only. We are evaluating expansion opportunities, and will certainly let you know if this feature becomes available in our international markets.



 2:31 am on Jun 10, 2007 (gmt 0)

Hi Yahoo Pete.

At what extent do you foresee yahoo following in googles footsteps?

I would hope that yahoo has a business model they plan on protecting and sticking with unlike the ever-changing ever evolving headache google offers to their advertisers. I would hope YSM would be a safer longterm place to put my money, time and energy.

How would you say the two compare as far as long term development is concerned?



 7:47 pm on Jun 12, 2007 (gmt 0)

I guess I'm naive If I'm expecting an answer to this one.

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