Yahoo Launches Quality-Based Pricing

At 6 p.m. PT tonight, Yahoo! Search Marketing will begin to roll out quality-based pricing across its sponsored search and contextual listings marketplaces to help increase ROI and reduce search marketing costs for advertisers, according to their Director of Public Relations Gaude Lydia Paez.

"We're especially excited about this launch, as it's one of many new capabilities that our new “Panama” search marketing platform enables us to build," Paez stated.

What exactly is quality-based pricing? In a nutshell, quality-based pricing assesses the quality of a publisher's traffic based upon the publisher's ability to deliver more interested, high-value potential customers to Yahoo!'s advertisers. A few of the factors considered by quality-based pricing include publisher conversion rates, traffic source and implementation type. Depending on the quality of a given publisher's traffic, the cost of an advertiser's click can be automatically discounted by a certain percentage.

This enhancement is a key step in Yahoo!'s ongoing efforts to build the world's highest quality search advertising marketplace. Quality-based pricing will help ensure that traffic from Yahoo!'s network is priced in a manner that is consistent with the quality it delivers to advertisers. At the same time, providing higher ROI and discounted bid should allow advertisers the flexibility to experiment with their savings and re-invest in their search marketing campaigns on Yahoo!.

We're rolling this out in phases, beginning with a select number of keyword marketplaces and then expanding it more broadly across our network over the coming months.

About the author

Frank Watson has been involved with the Web since it started. For the past five years, he headed SEM for FXCM -- at one time one of the top 25 spenders with AdWords. He has worked with most of the major analytics companies and pioneered the ability to tie online marketing with offline conversion.

He has now started his own marketing agency, Kangamurra Media. This new venture will keep him busy when he is not editing the Search Engine Watch forums, blogging at a number of authoritative sites, and developing some interesting online community sites.

He was one of the first 100 AdWords Professionals, a Yahoo and Overture Ambassador, and a member or mod of many of the industry forums. He is also on the Click Quality Council and has worked hard to diminish click fraud.