Yahoo Search Marketing announced this week that it will eliminate its 10 cent minimum keyword bid for text-based ads in the United States. Depending on the ad quality and value, and possibly other factors, some minimum bids may be lower or higher than 10 cents, according to Yahoo. Kristen Wareham, director of corporate communications for Yahoo, said, “In general, the enhancements we have been introducing since early 2007 should collectively help reduce cost-per-click charges when the quality of ads is higher, or when we discount clicks from certain partners' sites.”
A concern is that Yahoo’s Panama search advertising platform is only about one year old. An additional layer of complexity may present problems for people who are presently having difficulties with it. Some anticipate that the low to mid level advertisers will be hit the hardest because of the change and the higher advertisers will have the budget to ride out any fluctuations. This will affect advertisers depending on their cost per action.
If the minimum bid drops lower than 10 cents for certain keywords, smaller advertisers will take advantage. In the long run, it has been noted, this could stimulate competition by increasing cost per clicks. If I was a small advertiser and if keywords dropped below ten cents, I would invest in them.