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You can find hundreds or even thousands of best practices guides for AdWords, but there seem to be very few that are written for Yahoo.  I assume that you will know some of the Google ones, as this post will essentially just show the differences between Yahoo best practices and Google best practices.  If you need a refresher, check out some of these articles:

Ad Group Organization:

As in Google this should be done by the similarity of keywords (as opposed to similarity of definitions), however, it should also be done by keyword volume.  For example, if you have a campaign featuring all the colors of cars and trucks in your showroom, you should not just have and ad group for “car colors” and “truck colors”, but break these down even further to “High Volume Car Colors” and “Low Volume Car Colors”.  I haven’t found an advantage of cutoff points at specific limits, but for ease of design, I use 10,000 queries per month as my litmus test.  Keywords with more than 10,000 get into a high volume ad group, and keywords with less than 10,000 go into another ad group.  The query count can be found within the keyword tool in your account.

Ad Copy:

Yahoo has 40 character headlines instead of Google’s 25 character limits.  Use the headline as your call to action, with the body including your normal marketing message.  This inspires those who are attracted to the headline to follow through with the called-upon action.  Calls to action typically include a verb like “buy”, “save”, “order”, and can also include a time connotation like “now”, “today”, or “before 9/05″.

Also, no matter how tightly knit your ad copy is to your ad groups, you should almost always include the keyword insert.  Their systems love keyword inserts and it will almost always raise your quality score.  Like Google, higher quality scores mean better positions for cheaper clicks.

Landing Page:

Keyword-level landing pages is ideal.  Your conversion rate will be higher and Yahoo will give your ads higher quality scores if ALL the keywords within an ad group have a keyword-based landing page.  It can be the same page for all keywords, but they should all have it.  Remember what I said about high quality scores on ads?

The Long Description

Back in the day Yahoo had two types of ads: a short description and a long description.  The long description would allow 180 characters and be shown when your ad ranked high enought to be seen above search results instead of along the right side of search results.  It would also be the default ad copy for the content network.  This is no longer the case.  It’s dead.  Even if you fill it out you still need to write the short description ad, which will be shown for everything.  Don’t waste your time and just leave it blank.

Ad Testing:

Yahoo loves for ads to be tested, even if you know one will perform better.  Try to always have 2-3 ads in there, as it having a test ad does seem to impact quality scores of both ads.  Naturally they want the ad optimizer to be turned on (which optimizes based on how they’re paid: CTR), but I prefer to leave it off.  Play with it and determine which works better for you.

Hopefully this helps you optimize your Yahoo ads.  If you have any questions please feel free to leave them in the comments and I’ll answer them for all to see.

When discussing PPC performance, people love to refer to the low hanging fruit.  You know, that’s the stuff that’s easy to accomplish with little effort that yields great results.  This typically refers to getting more conversions for cheap, but how do you do it?  Here are a couple ways to pick that low hanging fruit and have cheaper conversions within a week or two:

Turn off the Content Network: Don’t get me wrong, the content network can produce great results–if managed correctly.  To manage it correctly it needs to be seperated from search, so turn it off on your search accounts and isolate content ads in their own content campaigns.

Add negatives: Run a search query report and look at all the search terms that have generated clicks.  Sort by impressions largest to smallest, and look for terms that are not converting and don’t resonate with your target customer.  Add them as negatives so future searchers of that term won’t see your ad.  If they’re weird terms but are converting, leave them alone.

Add misspells of converting terms: If your keyword “shoes” is converting like crazy, then I’m betting you that “sheos” or “shoeses” will too.  Add common misspellings and keyboard errors as exact matches as keywords, but make sure that the ad group doesn’t have keyword insert enabled, because then it might be taken down for editorial reasons.

Check landing pages: If terms that used to convert no longer do, maybe it’s the page you’re sending them to.  Make sure your page is what you want it to be.  If it is, test a different page or even create a whole new landing page for that keyword or ad group.

Pause poor performing ads: If one ad accounts for 80% of your conversions and the other only 20%, get rid of that 20% ad!  Let all those impressions and clicks flow to the better converting ad, and you should see an immediate lift in results.

Following these basic steps should yield immediate results (often times within hours or days).  If you have already done all of these, go back and run another search query report for a different time period than your original one.  After all, Google announced a while back that 20-25% of queries are ones they’ve never seen before.  Repeat this step every 30-60 days.  Now, go get some conversions!

It’s not uncommon for me to meet people who are interested in getting started with paid search, but have no idea how to get started.  That’s usually why they come to me in the first place.   More often than not, there is one question that trumps all others right out of the gate:  How much can I afford to pay?  It’s one of the toughest questions in search marketing, and it usually comes from a conversation that goes something like this:

I can spend $500 each month on advertising on Google and other search engines. But, what do I set my bids at? Where do I start?  How do I know what I can afford to pay for a sale?

If you’re like most people who have asked themselves this question, your answer is probably similar to theirs:  Less than what I’m paying now.

I’ve determined that the easiest way to answer this question from the beginning is to start at the end and consider how much profit we want from PPC, and using that to determine how much we’re willing to pay for a sale or conversion (typically referred to as a Cost Per Acquisition, or CPA).  So grab a pencil and some paper, or open an Excel window, and prepare to think about your goals.

Things to think about:

We need to consider a few things before figuring out what a reasonable CPA is:

• How much margin is gained from each sale?
• How often does your site convert visitors to buyers?
• Is your margin the same amount regardless of product or quantity, or does it vary per transaction?

Once you have considered this information–even in just ballpark terms–then you can begin working backwards to find out what you can afford to pay per sale and then determine your ideal cost per click.

First of all, how much of your margin are you willing to reinvest into the business in the form of future PPC advertising? This answer is based solely on your objectives and intentions, so there’s no way I–or anyone else–can tell you what this number should be.  As a starting point, you may want to consider this number in terms of a percentage. This will allow you to adjust your budgets over time so it’s easy to calculate modifications when you make changes in your pricing or cost structure. As an example, let’s assumes an advertiser is willing to invest 30% of her margin into PPC advertising to determine her ideal cost per conversion.  (I keep emphasizing PPC advertising because if you consider all advertising you will have a lot more volume from higher CPAs than you intentioned, and this will lead to a lot more money spent than you planned, and leave your original goals useless.)

EXAMPLE:  A website sells a product for $299.99, with a cost of goods sold of $194. This means the sale has a margin of $105.99. If she reinvests 30% of her margin, she would have $31.80, which would be your acceptable CPA.

Ta da! Now this advertiser knows how much she’s willing to spend for this $300 sale, roughly 10% of the sale total, or $30-32.

Determining Costs per Click

Once you know how much you can afford to pay on a sale, then you need to know how often you can sell a product to someone who comes to the site. This is where your site conversion rate comes in. If you don’t know this number already, simply take the number of sales (S) you receive on your site and divide it by the number if unique visitors (UV) over a given length of time, usually a month. Multiply this number by 100 and you have your conversion rate in percentage form.  As a formula, this would look like:

Conv Rate =(S / UV) * 100

To continue our example, we’ll assume that our advertiser has made 20 sales from 1000 visitors, which would be a conversion rate of 2% [2%=(20 / 1000)*100].  After you know your site’s conversion rate and your acceptable cost per conversion/sale, then you have the information to figure out what you can afford to pay per click to get those visitors to your site. Take your conversion rate in decimal form, (the conversion number you have prior to multiplying it by 100), and multiply it by your acceptable CPA.  In our case 2% is the same as 0.02, so the formula would look like this:

0.02*$31.80=Max CPC

Our advertiser has determined that her max CPC to meet her CPA is $0.64 per click. Voila!

WAIT! Don’t set bids to be $0.64! That would be too easy. Remember that your bidded CPC is rarely the same as your actual CPC, so you can go as much as 20-40% higher than your acceptable CPC to get close to $0.64 being your actual CPC.  In this case that would make the bidded CPC somewhere around $0.75-0.80.

DOUBLE WAIT!  There’s one other problem: This method doesn’t take into account competitive factors, ad copy changes, or landing page conversion rates, which all can have huge impacts on your costs per click AND your PPC conversion rates. So what do you do then?  Well, the honest answer is you test everything.  First of all, given the products/services you sell, is $0.64-0.80 a high CPC or a low CPC?  If you’re selling insurance you’re not going to be able to play ball with the big leaguers (unless you follow my advice on how to compete with bigger advertisers), and if you’re selling buggy whips, then your ads may be crammed in position 1, which is usually a good sign that you’re over-paying.  So test, and re-test again to see which of the variables, or combination of variables, gives you the best outcome.  You can always go lower and get cheaper CPCs and CPAs, but if you want to max out what you’re willing to pay to maximize volume, then this is how to get a good start.