How Does Yahoo Local Sponsored Search Bidding Work?

[Senator]

I’m really having difficulty forming a Yahoo Local Sponsored Search bidding strategy.

Their “Est. Max Bid” figure is almost worthless. I have tried repeatedly to get a clear, accurate and verifiable answer from Yahoo as to how the Est. Max Bid figure is arrived at. All I ever get is the reps guess of what it might be and they are all over the map. Some say it is derived from Sponsored Search bids, some say it is derived from other LSS advertiser in my area, some say it is from LSS advertisers in some proprietary Metropolitan Service Area (MSA) that I fall into, some say it is from all LSS advertisers throughout the country and then some will simply say “it is just an estimate, you have to experiment”.

When many of the terms I want to compete on have Est. Max Bids of $5-10, I don’t really want to be “experimenting” with my client’s budget! And it would be a very unproductive use of time to constantly ratchet up bids on 100s of terms just to arrive at some reasonable CTR.

Can anyone shed any light on this?

Thanks

[danielanaidu]

I have the opposite problem that you do. I bid in the regular sponsored bidding, and even though I bid high enough for the top position, I am frequently bumped down by advertisers such as yourself.

It's is frustrating in both directions, because I can't see what any of you are bidding either.

Sorry I can't shed any light. Also, I have a question that you can answer for me. Are you required to provide a physical address to participate in the local sponsored bidding?

[Senator]

There is an instantanious auction that takes place when a search is conducted. If the keyword contains a geographic qualifier, i.e. a city name, that will trigger Local Sponsored Search bids to be considered. If a LSS advertiser has bid higher than a SS advertiser, they get the higher position. There is no way for a SS advertiser to know what LSS bids will come into play for any given keyword.

Yes, a LSS advertiser must have a physical address.

Senator

[danielanaidu]

Thank you for the explanation. And does the LSS advertiser pay just $0.01 more than the SS advertiser right below him?

[eWhisper]

Also, I have a question that you can answer for me. Are you required to provide a physical address to participate in the local sponsored bidding?

Just to clarify - why you must provide YSM with a physical address, you have the option to display the results without the address listed.

[Senator]

Yes, one cent more. But one cent more than what? Meaning what position, what other advertiser, in what local area. My fear is that I am bidding against someone who isn't even in my market!

If I am a realtor in nowhereville, USA bidding on the term "realtor" with a "Est. Max Bid" of $5.00, am I bidding against another realtor in nowhereville or in Los Angeles, CA where they have a much more competitive market and deeper pockets.

Even if the $5.00 Est. Max Bid is from LA, but they don't actually participate in the "instant auction" for my market, then what do I bid? What is the real max bid for my market, and what if I don't necessarily want to always be in the number one position?

Someone out there really knows how this works, but they are probably at Yahoo and swarn to secrecy. I can not accept the fact that Yahoo doesn't have any more information than "it's just an estimate".

[Senator]

YSM will check out your physical address and probably will cross reference with some other form of listing. I know this from personal experience. This is why they have a review process and a "pending period".

[Kelly Lynam]

I feel your pain on this one. It seems like Yahoo! Local's approach is the black box as much as possible, similar to Google's bidding system. It's impossible to tell who's in any other positions...

Try searching on some of your own keywords and see what you come up with. Sometimes I'm surprised to see who else is there.