Yahoo Search Marketing has lowered its starting minimum bid to £0.05 for its pay per click programme and has written to advertisers in the UK this week to advise them.

This sounds as though it is a benefit and should encourage greater ppc activity in the Yahoo system but I wonder if that is correct. Will minimum bid reductions be a benefit to existing advertisers?

Extracts from the communication advise that: -

• Yahoo Search Marketing is launching today a new minimum bid variable pricing
  structure.
• As of today, bidding prices start from as little as £0.05 although they vary by search term
• They  hope this new minimum bid pricing will help you make the most of your Yahoo! Search Marketing account and allow you to drive even more highly targeted customers to your site.

For existing competitive keywords this will make no difference as a 5p minimum bid will see your advert published on page 8, so the initiative will benefit bids on new terms and those with little competition.

So thanks for the initiative, it may make a small difference at some point but it is not a major initiative that will improve the competitive position against Google Adwords or the rising threat from MSN.