What is Auto Bidding?

Auto Bidding is a powerful new way for Yahoo™ advertisers to manage their bids in the DirecTraffic Center®.

The Auto Bidding system allows advertisers to optimize their budgets by allowing them to set the maximum they are willing to pay for a click, and then adjusting their cost per click to give them the best price available. Advertisers pay only $0.01 more than the Max Bid of the next highest competitor without exceeding their Max Bids. For example, if an advertiser sets their Max Bid to $0.50 and the next highest listing has a Max Bid of $0.45, they only pay $0.46 per click -- saving $0.04 for every click.

What is the difference between the Bid Types Auto Bid and Fixed Bid?

An Auto Bid allows an advertiser to set the maximum amount (Max Bid) they're willing to pay for each click. Our systems will then look at the Max Bids of all the other advertisers in that search term marketplace and give them the best position available. The advertiser only pays $0.01 more than the Max Bid of the next highest competitor. As other advertisers change their Max Bids, our system will adjust their cost automatically so they maintain the best position at the best price available, without exceeding their Max Bid.

A Fixed Bid is what Yahoo has traditionally offered. It allows an advertiser to set the exact amount they're willing to pay for each click. Unlike Auto Bidding, with Fixed Bidding they pay the exact amount they input, there is no elimination of bid gaps.
For example if an advertiser sets their Max Bid to $0.50, they will pay $0.50 for each click, regardless of what the other advertisers in that marketplace bid.

What is a "Max Bid"?

A Max Bid is the highest amount an advertiser is willing to pay each time the listing receives a click.

Can advertisers see their competitor's Max Bid?

Yes, advertisers will be able to see the top five bids from the "Manage Bids" page. In addition, "More Bids" in this column will show the Max Bids for all other positions.

What happens if several advertisers in the marketplace submit the same bid amounts for the same search terms?

When two or more advertisers bid the same amount, seniority is given to the first advertiser who bids that amount. Therefore, if Advertiser A submits a $.50 Max Bid and another $.50 Max Bid already exists from Advertiser B, Advertiser A will appear after Advertiser B.

Can advertisers bid by position?

Yes, there are several ways advertisers can bid by position.

The easiest way is to use the "Top 5 Max Bids" information, found on the Manage Bids page. This will show the Max Bid an advertiser needs to exceed in order to move into one of the top 5 positions. For position 1, the advertiser needs to bid at least one cent higher than the current Max Bid at position 1. To retain this position longer, we recommend that the advertiser set their Max Bid more than one cent higher than the current Max Bid for position 1. Remember, if the advertiser chooses Auto bidding their cost will only be $0.01 higher than the Max Bid of the advertiser at position 2, regardless of how high they set their Max Bid.

For advertisers who would always like to get the best possible position for their bid, we recommend that they set their Max Bid to what they're willing to pay on the Manage Bids page and our systems will make sure the advertiser gets the best possible position for the best cost without exceeding their Max Bid.

It's important to remember that using this option does not automatically maintain an advertiser's position when other competitors adjust their bids. Because of the dynamic nature of our marketplace, we recommend that the advertiser frequently check their listing(s) and adjust their Max Bid to ensure they maintain their desired position within the search results.

You can always see which position your listing has achieved on the Manage Bids page in the "Position" column.

What role does Yahoo foresee Bid Management Licensees playing under Auto Bidding?

Yahoo sees an ongoing valuable role for third parties in working with Yahoo. For companies that wish to maintain a guaranteed position on an ongoing basis, additional bid-management services may be just as useful as they were prior to Auto Bidding. In addition, bid management services may also be helpful for companies that wish to utilize complex bidding rules.