Yahoo Expands Quality Based Pricing. Translation: Publishers Get Less

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Earlier this week Yahoo sent out an email to Yahoo Publisher partners (third party sites that display Yahoo cost per click ads). The email says they should expect new pricing adjustments “based on our assessment of the quality of traffic coming” from their sites.

Yahoo (and its competitors) make adjustments to CPC payments out to publishers based on the perceived “quality of traffic.” Supposedly these payments are credited to advertisers, but there is really no way to know. The changes Yahoo implemented appear to make more dramatic adjustments to outbound payments.

The result of the change, say two publishers we spoke to, is a drop in already-low revenue payments.

“I’d describe the drop as annoying, but not devastating,” said one publisher. But he added that “The way they do it is in a total black box and leaves us helpless to improve things. Yahoo gives you ZERO insight into what bad traffic is or looks like so you can do NOTHING to improve the quality of the traffic you bring to Yahoo.”

Yahoo is also saying that in some cases they will increase payments to publishers with higher-quality traffic. The publishers we spoke to about this are skeptical.

More reports from publishers should get to us over the next few days, and we’ll update this post with new information.

The email is below:

Quality-based pricing is an important component of our goal to deliver high-value traffic to our advertisers, a high-quality experience for users, and long-term success for our distribution partners.

On September 9, 2009, Yahoo! upgraded the quality-based pricing system which adjusts advertiser click charges based on our assessment of the quality of traffic coming from sources within our distribution network. The new version of quality-based pricing may result in discounts being applied across more keywords, and/or deeper discounts for lower-quality traffic. Additionally, for the first time, it may also result in a pricing premium for higher-quality traffic. This enhancement will affect our Sponsored Search and Domain Match traffic only.

If you have any questions regarding this upcoming change, please contact your account representative.

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