Yahoo! just announced that they’ll now give advertisers discounts based on and ad’s “quality”–or, more specifically, how well it converts.
Search Engine Roundtable‘s Barry Schwartz puts the news into perspective:
Yahoo is looking at how a publisher may convert for advertisers and adjust the pricing of the ad based on that. I asked Yahoo to clarify:
Rather than the overall number of leads sent to advertisers (conversion rates), the publisher conversion rate is the number of leads that the publisher send to advertisers that actually result in a conversion (e.g., a sale, a sign-up, etc. – whatever the advertiser has defined as a conversion event).
So it is not based simply on click through rate. So I asked what happens when an advertiser doesn’t set a conversion metric? Well, since it is based on the “aggregate performance across the Yahoo network,” even if one advertiser doesn’t set a conversion metric, others probably will and they can use those data points in determining the pricing of the bids.
The publisher feedback and comments are definitely worth checking out. This news comes in the wake of Google‘s announcement in March that they would offer a Pay-Per-Action model, which also (theoretically) promotes overall conversion.
Will these changes affect your advertising strategy? Are the big search engines just trying to not seem greedy, or do you see this as an honest effort to make ads more relevant?