Change in pricing algorithm may lower parking payouts for domainers.
Yahoo! (YHOO) just announced changes to its pay-per-click advertising program that will change the amount advertisers pay for clicks based on click quality. The company says it plans to “expand the adjustments” it already makes to click charges based on the quality of traffic the advertising source delivers.
Although this may seem like it has an upside — good domain traffic would be rewarded — it appears to skew in the other direction. In an email to customers, Yahoo! wrote:
These adjustments will be based on our assessment of the performance of the traffic source, and will not be affected by the quality of your ads. Based on our analysis, we expect that most advertisers will see click charges drop or remain unchanged, while a small fraction of advertisers may experience an increase in click charges.
I think it’s something that we have seen coming for a while. I don’t know exactly what the changes are exactly, but I have been told that it will really affect anybody with low TQ scores.
Donny, how do you think it will affect overall parkers. For example on Parked you only get a TQ if you get 100 clicks a day or something. So will the overall pool likely head south?
With now only 2 main players why would PPC do
anything but go down ?
Anthony
Domain parking is finished. $1.00 clicks will become .10. .20 clicks become .01. The writing is on the wall and has been for the past year. Soon you will start to see parking companies closing up shop. The only domainers who are semi safe are the big guns who own single word and generic two word type-ins. They are not safe from reduced revenue but are safe base on the secondary market value of the names they hold in their portfolio.
Even affiliate marketing has been taking a huge hit lately. Adwords accounts being banned all over the place. Yahoo is trying to close down all rebill offers just like Bing is doing. It’s a bad situation for affiliate marketers too.
It’s sad to see this all coming to an end quickly. Domain parking has been very good to me over the years but it’s now time to look into other revenue streams. Developing real business with real content is the only way to go.
It use to be that I had my business split between Y and G. Both have been spiraling downward and downward.
Yahoo’s new nail in the coffin will force me to point the Y domains toward G. I guess I will start doing that over the next few days.
I don’t think this will affect many people potentially. They have already switched this in the Australian market about 2 weeks ago. We say most people actually get paid more in the AU.
As Donny pointed out IMO it will increase cpc for non US traffic and lower it for US traffic. Bottom line is this, domain channel traffic is of lower quality that their base from yahoo.com searches and thus we’ll see lower payouts.
I think this may help us if I’m reading this correctly, and here is how:
We already get our payouts adjusted for TQ. Theoretically we get reduced to 40% of our potential payout for a TQ of 4, and 80% for a TQ of 8 respectively. What I am reading is that Yahoo was still charging the advertisers the full amount, which means that yahoo had been pocketing the difference. The lower our TQ score the more profit for Yahoo.
So now, if Yahoo actually starts passing the TQ discount on to the advertisers, then the advertisers will actually pay appropriately for the traffic quality, and we will still be getting paid the same as before since we were already getting discounted. The only difference is there will be no difference for Yahoo to pocket.
This should be encouraging to the advertisers, since they will be paying less, and more appropriately. In return perhaps the ad-base will grow which would be good.
Bottom line though, we already get discounted for TQ, so where is the differenc for us?
JP – I don’t think this is true. yahoo was already charging the advertiser less.
FX – I didn’t say that. I think people who have lower quality traffic will be paid less. And people with good traffic will be paid more. These changes will affect all countries, not just the US.
I was just at Yahoo’s headquarters on Monday and they said that the domain channel in some cases are actually better than Yahoo’s own traffic.
I think I’m confused then, because I also thought that yahoo was already charging the advertisers less, until I read this post.
JP – they’ve had “smart pricing” for a while. These are just “deeper” cuts (and increases) in click prices.
Actually as it was explained to me, their version of smart pricing was only on certain keywords. This will now be enabled on ALL keywords. The second part is that let’s say you had a tq of 1, you may have gotten 50% of the original bid. Now you may only get 10% of the bid. Which is how it should have been from the start.
Donny, in that case this is long overdue.
So basically in the past yahoo was not discounting correctly based on What the tq was? So tq 5 was paying the same as a 1 on some keywords?
But essentially they will be dicounting correctly now right? If that is the case this is probably a good thing long run
“They are not safe from reduced revenue but are safe base on the secondary market value of the names they hold in their portfolio.”
If parking revenue falls aftermarket domain values will fall with it.
This is already existing concept but not side of advertisers.Parking companies take discounted money when their publisher’s tq scores are the lower than 5 but advertisers was paying normally ,yahoo take full from advertisers ,cut from parking company.In my opinion this change is like that ,some scammer companies like parked.com can claim your tq score is low and pay low money ,dont believe scammers ,parked can do everything inorder to steal your money.The best thing is avoid to deal with scammer companies like parked.com the leader in scam.
Rich – you’re very convincing.
Its not convince.Parked.com’s previous website parkednames was terminated by yahoo in the past and the scam continues via parked,dotzup,whypark and some others. This company is scam ,many people were scammed by them.Its the reality,parked force the websites to delete the real posts about them.
Rich – You are funny.
I always assumed Yahoo was charging a discount to the advertiser based on the TQ score, but just earlier this week I was told it was only on a select group of domains. We are talking about on the short tail keywords that were being discounted to the advertiser and the partners. I asked if they had specifics on what was a long tail vs short tail and it sounded like the short tail was anything with more than 10 clicks in a month across the entire network.
I think overall the new system will be good as long as you have good traffic.
Me as an advertiser can confirm that domain channel quality is almost as good as search quality. What is bad is Adsensse ads quality.
For TQ – it would be really great to be able to tell which domains ar causing lower TQ and be able to move them elsewhere (or to second account)
I believe paying more for a good TQ and less for a low TQ makes sense and is a good move overall.
At a minimum, this is not the place for this. Andrew you should delete these comments.