Yahoo! Reserves the Right to Waste your Money!
As a small or medium sized business advertiser, bravely trying your hand at search engine marketing, you may feel somewhat comforted by Yahoo!’s new Terms and Conditions. Your getting a warm and cozy feeling knowing that Yahoo! is going to look out for you and your business. Maybe your campaign isn’t getting as many sales as you would like, or maybe it is and your entirely comfortable with your current campaign. Either way, it doesn’t really matter.
Then all of sudden, much to your delight or dismay, Yahoo! comes sneaking into your account like a stealthy knight in shining armor to save the day. Your stealthy savior doesn’t really know much about your business or your goals, but despite that fact, they dive right in with only “your best intentions in mind” and start adding keywords, ad copy, reorganizing, hacking, slashing and “optimizing” (in a very loose sense of the term).
Afterward, you get an email saying something to the effect of “you just got served, sucker!” In reality you did just get served–your ads just got served on new keywords and with new ad copy, not of your creation. Your campaign runs through its modest budget in no time and traffic goes through the roof, but sadly your sales remain stagnant.
According to Yahoo!’s new Terms and Conditions, this could happen to you if you happen to be running your campaign off of your credit card like the majority of smaller budget advertisers. See below taken from their Terms and Conditions:
“OPTIMIZATION. In the U.S. only, for those advertisers not bound by an Insertion Order, we may help you optimize your account(s). Accordingly, you expressly agree that we may also: (i) create ads, (ii) add and/or remove keywords, and/or (iii) optimize your account(s). We will notify you via email of such changes made to your account(s), and can also include a spreadsheet of such changes upon your written request. If you would like any of such changes reversed, please reply to such email within 14 days of the change(s), and we will make commercially reasonable efforts to reverse the change(s) you specifically identify. Notwithstanding the foregoing, you remain responsible for all changes made to your account(s), including all click charges incurred prior to any reversions being made. It is your responsibility to monitor your account(s) and to ensure that your account settings are consistent with your business objectives.”
If you’re like most businesses and enjoy making money, then optimizing your search campaign means maximizing sales and return on investment (ROI) by efficiently managing ad spend in a thoroughly targeted effort. The optimization factors most important to you are sales and revenue, conversion percentage and ROI.
If you’re a search engine like Yahoo!, then optimizing has an entirely different meaning. Yahoo! is in the business of selling you traffic, the more clicks your campaign receives, the more you spend and the more money they make. You may notice that “getting you sales” is not a part of the previous sentence. For Yahoo!, optimization comes in the form of impressions and clicks, click through rate (CTR) and ad spend.
In case I’m not being clear, here is the disconnect: impressions and clicks do not equal sales and revenue; CTR does not equal conversion percentage; ad spend does not equal ROI. Optimization is solely a function of perspective and is unique to the optimizer’s goals. If you don’t happen to be in the business of putting your money in Yahoo!’s pocket, then the prospect of Yahoo! optimizing your campaign should be a frightening one.
Today, Yahoo! can stuff their pockets with your budgets. Tomorrow, this new policy has the potential to be very damaging as small- and medium-sized advertisers flee to safer waters (i.e., Google, MSN, Ask.com, etc.) as a result of failing campaigns.
So beware! Watch your campaigns closely and keep your daily budget caps tightly in check. Yahoo! reserves the right to waste your money!
~Jared Schroder
on January 30th, 2009 at 8:55 am
Yahoo!’s shady new PPC policy: http://tinyurl.com/autjxc
on February 13th, 2009 at 10:25 am
To follow up on the above blog post, please note that you can opt out of this offering by contacting Yahoo. Also note that this is not new – the only change to the T&C’s recently (Dec) was to change from Overture Services to Yahoo Inc. This offering of optimization for advertisers on credit card (NOT invoiced), was already set back in June / July of last year.
on February 13th, 2009 at 11:08 am
While this change isn’t new to the “T&C’s”, most small and medium sized advertisers are unaware of this automatic Opt-In for optimization. The main point is that this is not an “offering” at all, but rather an invasive control over an advertisers account. If you’re reading this now, and you’re a credit card Yahoo advertiser, you should definitely consider opting out of this program before any damage is done. Search Engines don’t optimize towards real results like sales, they optimize towards traffic. Those ideas don’t normally mesh too well. This should be an OPT-IN ONLY option, for advertisers who are actively seeking assistance, rather than an “after-the-money-has-been-wasted, maybe you should have looked a little more closely at your T&C’s” Opt-Out option.
on October 7th, 2009 at 12:26 pm
Hi, my name is Andy and I work for Balestriere Lanza, a trial and investigations law firm in New York. Our firm has been investigating potential misconduct on Yahoo’s part for some time now, and I would be very interested in hearing your stories and experiences. Please feel free to contact me at your convenience at andrew.detty@balestriere.net or at (212) 374-5400 x 134.