Yahoo! will be launching their new Network Distribution feature on Tuesday, January 19th, 2010. This will allow advertisers to optionally opt out of the Yahoo Search Partners sites for PPC ad display, and will also allow Yahoo! PPC advertisers more control over how they bid on ads.

Advertisers will have the option of displaying ads on:

• The Entire Network – including Yahoo! Search and Yahoo! Partners
• Yahoo! Search – includes all Yahoo! O&O properties and co-branded sites only
• Yahoo! Partners – includes all Yahoo! Partners Only

In addition to opting out entirely, advertisers will also have the ability to apply a premium or discount (measured as a percentage of Max Bid) to their bid on the Search Network. This comes with a couple of caveats:

• Bidding Adjustments (up or down) is done by % only, not dollar amounts
• These bids are relative to the Yahoo! Search Network bids, so no discounting on the main Yahoo! Search bids
• This is for the Search Network only – not Content Match

Yahoo! gives the following warnings:

Once the new features are launched, Yahoo! will also make available a Network Distribution Performance report.

So, once this new feature launches, how should you use it? If Yahoo Search Partner site ad displays are adversely affecting your Yahoo PPC Performance, I recommend three approaches, which can be used in combination, depending on your agressiveness in tracking campaigns:

• Use the Blocked Domains list – this gives fine control over blocking specific domains, but many advertisers run up against the 500 domain limit, and still have problems with underperforming domains.
• Bid down agressively – if you have a gauge of the relative performance of your Yahoo! Search vs Yahoo! Partners sites (you are using Conversion Tracking and Analytics, right?), you can use this measure as a guide to how much you should discount bidding on the Yahoo! Partner sites
• Opt out entirely – this will eliminate the poorly performing domains, along with perhaps 50% or more of your ad inventory. Opting out entirely would provide the best immediate change in performance, at the potential cost of “throwing out the baby with the bathwater.”

We are all eagerly awaiting this new feature since it will give PPC advertisers much more control over the ad delivery and bid prices for Yahoo! PPC Campaigns.