Pros And Cons Of Yahoo's Quality Based Pricing And What They Mean To Publishers

Google did it first. When Google Adsense decided to implement smart pricing, some publishers balked. After all, that can only mean one thing: affected revenues. Unlike before, more emphasis is being placed on the quality of your site's traffic. No conversion, no revenue. It's that simple. Now it's the same situation Yahoo's publisher network faces with the company's quality based pricing scheme or QBP. So what does this mean to you as a publisher and what are its pros and cons?

How doesYahoo's quality based pricing work?
Yahoo's quality based pricing is part of the evolution of its advertising network. Publishers must be able to deliver better customers who offer more value to advertisers. Conversion is one of the key considerations for Yahoo to consider its publisher's quality, although other factors come into play, such as implementation types and original traffic sources.

Launched in the second quarter of 2007, Yahoo's quality based pricing has an initial limited roll out, so only certain keywords are included. But you might not need to wait long, though. Yahoo plans to use its quality based pricing scheme to more keyword groups before the year ends. Yahoo's quality based pricing affects both sponsored search and content match.

Advantages of QBP

Quality is the name of the game
If you already have good to excellent quality traffic, you should be receiving the kind of value that you deserve. That is, provided you can produce quality traffic in the first place.

A better internet future
Another advantage that Yahoo's quality based pricing can give to publisher networks is that it will encourage publishers to boost their campaign to produce quality traffic. Yahoo's Reggie Davis remarked that publishers can very well take advantage of this new market by increasing the quality of their traffic, using high quality websites.

Because traffic is boosted and quality is a major concern, consumers and Yahoo visitors can expect better, more relevant search results. This will lead to an increased participation in the Yahoo environment. The result is a better, more robust internet experience (courtesy of Yahoo, of course), which in the end, will benefit everyone, including Yahoo's publisher network.

Disadvantages of QBP

Negative effect on revenues
If you moved to Yahoo because of Google's similar pricing scheme, you're probably feeling trapped. Quite simply, the main disadvantage of Yahoo's quality based pricing for its publisher network is its impact on revenues.

Say for example you get a good number of traffic on your site and most of them click on your page's YPN ads. If these clicks don't become conversions for your advertisers, you could stand to lose income. Poor conversion just will not do for Yahoo's new pricing scheme. Already, some publishers who posted their sentiments in online forums have reported a decrease in their earnings, even if their ad impressions increased.

Yahoo ads may not always be relevant
Another reason why Yahoo's quality-based pricing may not be advantageous to publishers is that Yahoo ads that appear on a site may not always be relevant. For example, if you have a site that promotes power tools and ads about home mortgages and cell phones appear, you definitely will not see a lot of action (and revenue) there. Ads that are highly irrelevant have a minute chance of getting noticed by visitors. Worse, it's not even the fault of the site's publisher.

Advertisers don’t have access to conversion metrics
Advertisers do not know which publisher offers lower or higher quality and which clicks from which publisher got converted. Furthermore, advertisers have no control whatsoever in terms of profits and branding, something that publisher networks will not benefit from.

So is Yahoo's quality based pricing the result of bad planning and poor marketing? If present sentiments and figures are to be trusted, many publishers strongly feel that they are at a disadvantage and that advertisers are getting the better part of the bargain.

However, there is still that nagging feeling that we probably should trust Yahoo, as long as it's able to fine tune its ad relevance. Their goal, as they have indicated, is to create a marketplace where everyone can participate in and benefit from, whether you're a consumer, advertiser or publisher. The search for quality almost always doesn’t end in tears and if Reggie Davis' words come true, it could be a better future for all of us. But if waiting is not your strong characteristic, there's always Plan B. You can pack up and move out of the house to join another.