Jeremy received an email from Yahoo saying that 65% of his traffic is signing up for YSM with stolen or unauthorized credit cards and that Yahoo intended to cancel his account. Note that this isn’t Jeremy undertaking fraud, this is people clicking through or singing up to the program based on his recommendation. Jeremy responded by asking where the signups were coming from, after all although he promotes the program through his blog there is nothing stopping others from using his details elsewhere, particularly if they intended to target Jeremy and damage his account.

Yahoo’s response: they were unable to know which site(s) the signups were coming from.

Jeremy’s response (in part):

If you keep no logs of referring urls then….. I guess you just can’t do any sort of quality control.

I feel this really reflects badly on Yahoo!

After another round of emails:

I think you should hire a company who can properly validate credit cards. The data is on your end I have no clue how to tell Yahoo! how to do better fraud prevention.

I just want you to know and pass it on that I think its a bunch of crap. I have spent a lot of time promoting Yahoo Search Marketing on and offline following all of your guidelines and operating in full cooperation. I even just showcased your program at Blogworld in my presentation.

Yahoo offered to speak with Jeremy at Pubcon last week then didn’t, then promptly terminated his account.

The whole thing raises some very interesting questions: why can’t Yahoo block or filter fraudulent transactions? Why is it that the affiliate is punished for the actions of others? Why, particularly given its underdog status in search marketing, would Yahoo act to terminate one of its biggest advocates? If you’ve ever run an affiliate program on a site this is always a risk, but most companies will act on blocking fraudulent transactions, not terminating the affiliate.

The new service automatically converts creative campaign elements and offerings into highly customized and relevant display ads by delivering ads according to the Web surfer’s age, gender, location and online activities.

An example given by Yahoo of the new service:

“If a user is browsing for hybrid cars in Yahoo! Autos and has selected San Francisco as their default location in Yahoo! Weather, Yahoo’s SmartAds platform can assemble and deliver a display ad in real time that showcases a hybrid vehicle from a major auto brand, as well as local dealer information and current lease rates….providing a relevant experience to the user and allows the marketer to reach a user who is likely to become a customer.”

Yahoo Smart Ads is the natural next step forward in contextual advertising delivery. The new service will drive new business to Yahoo, however improved targeting alone does not create a market leader; it’s only one part of the contextual advertising jigsaw puzzle. Scope is still Google’s key selling point; as long as Google offers a superior inventory, Google will continue to lead the field. Yahoo Smart Ads will drive further innovation in the space; Google is bound to offer a similar service in response, and ultimately this is good for all advertisers.

Previous Yahoo Search Marketing coverage here.

Panama will bring much needed updates to help Yahoo compete more effectively with Google’s contextual advertising platform. Under Panama, ads will be served and ranked based on a variety of factors, such as click through rates, instead of just placing the highest bidded ads first. The result should be significantly higher revenue to Yahoo and its partners.

Yahoo released a statement about Panama, touting its easy five-step sign-up process. According to the release, “advertisers can quickly create campaigns, determine their desired position, understand their potential share of available clicks, set their budgets, and then see their ads online within minutes. In addition, Yahoo’s new ad testing and optimization features allow advertisers to easily test their creative options and manage their campaigns to the goals they have for return on investment.”

Yahoo will transition existing customers to Panama one market at a time. Once the U.S. has been completely transitioned, Yahoo will announce international roll-out plans.