Yahoo! Sponsored Search: Setting Bids and Budgets

By Janet Driscoll Miller | May 31, 2006
More Articles by Janet


Yahoo! Sponsored Search works differently than Google AdWords when it comes to bids and budgets, so it’s important to know how Yahoo! works so you don’t accidentally overspend.

<h2>Setting Bids</h2>
Like Google AdWords, when you place a bid on a keyword or ad, you are not charged the exact amount you bid necessarily. You are charged $0.01 more than the next highest bidder. So if you’re at position #1 bidding $1.00 and the second position advertiser has bid $0.50, you will only pay $0.51/click.

There’s a pro and a con to the current way that Yahoo! Search Marketing approaches setting bids.

<i>PRO:</i> Unlike Google AdWords, Yahoo! Search Marketing allows you to actually pick your ad position! Want to be #1, no problem! Want to be #5, no problem! Yahoo! tells you the exact bids for each position. So if you want to be #1, just bid more money than the top bidder. Want to be #5? Then bid above the current #5 ranked ad and less than the #4 ranked ad.

Why is this a pro? Well, often you’ll want to position different ads for different keywords at certain spots. For example, if you are trying to brand your name with a particular keyword and receive top visibility, you may want to always be #1 to be perceived as the brand leader. But studies also show that ads at positions 4,5 and 6 tend to get higher conversion rates than those at positions 1, 2, and 3. So if conversion is your main focus for that keyword or ad, you’ll want to ensure you’re placed a bit lower. Yahoo! gives you the power to DECIDE YOUR EXACT PLACEMENT. Sometimes a nice option to have.

<i>CON:</i> A major downside to the Yahoo! Sponsored Search is that bids are set by individual keyword or ad, not by category, as you can do with Google AdWords. Why is this a bad thing? While you may have just a handful of keywords, many companies have hundreds or thousands of keywords to manage. That means managing EACH KEYWORD and ITS ASSOCIATED BID SEPARATELY! If you’re like some of my clients and have over 2500 keywords, that’s a lot of individual bids and placements to manage. And unfortunately, Yahoo!’s sort/search tool in the Sponsored Search does not let you filter your keywords by position, so you can’t just search for those that are below position #3 and increase the bids. FRUSTRATING!

<h2>Setting Budget</h2>
Like Google AdWords, Yahoo! Sponsored Search also allows you to set a daily budget. However, unlike Google, Yahoo! will overcharge you much less because a daily budget is considered just that — a budget for that day — not a budget extrapolated over a given month, as Google treats it.

To set your daily budget feature, first go to the Money Manager tab in your account. Under this tab is the Budgeting link. Select “Budget On” and set a daily budget in the table. This will also show your approximate monthly spend based on your daily budget that you enter. To save the settings, click Submit.

Budgetting is helpful to ensure you stay within your marketing budget, but it may reduce the visibility of your ads. Once your daily budget is met for any given day, your ads will stop showing until the next day — essentially a new budget day.

Tomorrow: Yahoo! Search Marketing: Setting Up Conversion Tracking

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