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Tuesday, February 26, 2008
I just learned that Yahoo Search Marketing is introducing reserve pricing in their keyword auction. Although the Panama system already included a quality index, this was for ranking purposes only. Now, similar to Google's auction, Yahoo can raise minimum bids to dissuade low-quality advertisers further. It can also, presumably (like Google) use this system to optimize (i.e. increase) its own revenues, concurrent with improving the user experience. Win-win, n'est-ce pas?
In light of these sophisticated systems, talk of a fresh comScore report that shows Google's total US paid clicks have leveled off seems like just noise, although the stock market seems to take it quite seriously. When you sharply raise minimum bids on many keyword buys, as part of a quality initiative, it only makes sense that click volume will take a hit. But will Google's short and long term profit benefit? That's the real question.Labels: ad quality
Posted by
Andrew Goodman
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D'oh!
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