yLawyers quip about “selling the other party a vest with no arms,” which means ceding the opposition a settlement solution which sounds accommodating but gives up little.

Yesterday’s Yahoo Search Marketing announcement regarding discounted PPC click-throughs for low value traffic could be just that. The source quality tweaks purport to address the sometimes fuzzy value of PPC traffic and may impact the cost, ROI, and tactics PPC managers employ for paid search on the Panama advertising platform. I’m leery and wonder what exactly Yahoo just gave us. It sounds like more PR from a first tier PPC engine which understands the perception of rampant click fraud is partially true.

Source Quality
In an “attempt” to consider the “quality” of partner-site source traffic when an advertiser is charged for Content Match and Sponsored Search click-throughs, Yahoo “may” discount the amount charged for such clicks based on a black-box traffic source quality algorithm. Many advertisers do not use Panama Content Match because of the sometimes dubious quality and high cost of clicks such as these.

The salient fact here is that Yahoo is admitting by proxy that sometimes Content Match and Sponsored Search traffic is tainted enough that they feel the need to attempt evaluation and lower the cost for less-valuable clicks.

“The traffic quality from our partner websites is calculated based on conversion rates and other measurements of the ability to deliver quality traffic.”

What the heck does that mean? There is nothing in the program as of yet to monitor what MY conversion rate is or how useful the traffic is to our clients. Yahoo does not reveal the criteria by which they grade the quality of the traffic except to state that the “overall quality of the traffic source” is considered when “warranted.”

Another Black Box
There is no transparency whatsoever in the process. Yahoo won’t report specific information on discounts received, does not publish a list of discounted publishers or URL’s, and does not presently provide opt-out capabilities for particular sources of traffic. According to Yahoo some of these features may be coming later in 2007. Essentially Yahoo just told us to trust that they know when traffic is bad and we won’t be charged as much. Stay tuned to see if the fixes actually impact the bottom line in terms of conversion rate and/or cost.

Here are some blog buzz posts regarding this announcement:
Yahoo Panama Ads charge by Quality of Ad…
Yahoo Panama Ads Charge by Quality of Ad…
The Chicken or the Egg? Yahoo Rolls Out Quality…
Yahoo! Panama Quality Based Pricing

  • Boris Mordkovich

    Marty,

    It’s definitely a very good move on Yahoo’s behalf.

    However, I do wonder as to how they will measure the quality of the traffic sources.

    They claim to use the conversion rates, but they depend on so many factors outside the traffic source (e.g. landing pages, keywords, ad text, etc.) that I don’t know how reliable they are.

    Plus, where would they even get all of that data from? Not all of the advertisers are using their conversion tracking…

    It would be interesting to see more details about that.

    Boris Mordkovich
    http://www.adwatcher.com

  • Marty Weintraub

    I agree. Any forward motion towards transparency is good for advertisers. The Yahoo announcement was heavy on great intent and light on backup details.
    m

  • Boris Mordkovich

    It’s a step in the right direction :)

    Boris