As promised last week, Yahoo has begun its move to variable minimum bids for keyword-based ads that appear alongside search results.
The company announced Thursday on its Yahoo Search Marketing blog that the gradual change has begun. Yahoo said the move is designed to improve ad relevance while opening up options to some advertisers who previously couldn't afford to participate. For example, making some advertisers bid more for an ad should help screen out bidders who aren't serious, the company said.
Another factor is advertiser quality. Those whom Yahoo esteems, on the basis of factors such as the rates that searchers click on their ads, potentially could be offered lower minimum bids.
Ad relevance is important because low-grade ads discourage searchers from clicking and from trusting ads in general. Conversely, high-quality ads, with attributes such as a useful "landing page" Web site that appears after a person clicks, lead to more clicks and a better image for advertisers overall.
"Yahoo just raised my minimum bids by 3-4 times on many keywords. They must be out of their minds," said one. Added another, "They have increased my bids by 2-3 times. Small business advertisers like me will be highly affected by this. We just can't increase our prices to such highs--it won't work on our ROI."