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Quality-Based Pricing; YSM, YPN and You

Posted on 6.05.2007

Yahoo! made a big move this week by changing its straight cost-per-click algorithm to a "quality-based pricing" offering. This affects not only advertisers using Yahoo Search Marketing, but those participating in the Yahoo! Publisher Network as well.

Via the YSM Blog: “Quality” is calculated based on conversion rates and other measurements of the ability of our partners’ sites to deliver more interested, valuable customers to you.

Let's slow this down a little and see if we can explain it for all the parties involved. Before quality-based pricing, advertisers were charged the same amount per click for traffic sent from publishers (affiliates) regardless of the quality of the traffic being sent from sites displaying Yahoo advertising.  Now you will be charged less if your advertisement appears on a site that traditionally converts at a lower rate than other, better performing sites. Of course, if a site converts better you will also be paying more. Fortunately you (the advertiser) will be paying less for traffic that does not convert and more for traffic that does (arguably much more). In the end it's sort of a wash - a good clean wash. 

How does this affect you if you're a publisher/affiliate? Well, you should probably look elsewhere for monetization opportunities if you're using YPN as a substitute for content.

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