In February, Yahoo announced that minimum bids for Sponsored Search will no longer be fixed at $.10. And yesterday, they announced that the change has taken effect.
Buyers may find that new minimum bids may be set lower or higher than $.10 for Sponsored Search ads. However, Content Match minimum bids will stay fixed at $.10.
Comparing the new minimum bids to auction house reserve prices, Yahoo said that two main factors will drive the price – quality and value. High quality ads could be rewarded with lower minimum bids, while value will be determined by how many advertisers are bidding on a particular keyword and how much they're willing to pay for it.
Ads become eligible for display when a buyer's bid is equal to or greater to the minimum bid. Users will be notified through their Account Dashboard if the minimum bid goes above their current bid. A grace period of several days will be given to raise bids.
The implementation came in the wake of news that Yahoo's testing of Google ads was successful. Yahoo releases first quarter revenues next Tuesday.