Today I have received an email from Yahoo! stating that they are no longer fixing the minimum bid for UK search keywords at £0.05, although the content network bids will remain at a £0.05 minimum. This change is to take place in the coming weeks.
Yahoo!’s reasoning behind the change is "This pricing change is intended to align your minimum bids with the value and quality of your keywords. It is also designed to help improve the overall search user experience by rewarding advertisers for better quality with lower entry points into keyword markets."
Personally I think this just shows how Yahoo! are moving ever towards the Google ‘quality’ based model, and Yahoo! have come a long way since they used to display all advertisers Max CPCs and it was much easier to manage the bid gaps!
This change could possibly be in relation to the recent introduction of Google Ads within the Yahoo! landscape, as they aim to integrate the listings in the easiest manner possible.
The good news is that those CPCs that are already working well and have a high quality score should reduce further, which will be brilliant as it will generate a better return. Although it also works the other way, and keywords that are not working well and have a lower quality score could rocket to become stupidly expensive.
Advertisers will be aware of the fact that the CPC levels determine the effectiveness of a campaign so they should review and monitor them closely over the next few weeks.