Yahoo Search Marketing UK announced to advertisers today via email that the starting bid prices on some keywords will be reduced to £0.05 from 19th January.
“In order to reflect the dynamics of the market, and to help you maximise your return on investment, Yahoo! Search Marketing will introduce a new minimum variable bid pricing structure. This means that from January 19th, our bidding prices will start from as little as £0.05, which is great news for your business!”
One can only assume that “market dynamics” refers either to increased complaints from existing advertisers about their campaign ROI, or Yahoo’s need to attract advertisers and make themselves more competitive with Google AdWords, where starting bids can still be as low as 1p.
This is, in fact, good news for Yahoo’s existing advertisers, assuming those advertisers invest time and effort developing “long tail” keywords with little competition as those will most likely be the type of terms to which this lower pricing applies. This means advertisers will incur an even lower cost risk on such terms, but will not necessarily lead to a significant increase in overall ROI since many advertisers incur the bulk of their costs on more generic “head” terms.
It’s certainly hard to complain about lower pricing, and this action may attract more advertisers, but it will have little impact on what Yahoo! needs most in the UK and the rest of Europe…a higher market share of searches.
