Yahoo! cuts agency commission rates

Yahoo! is to cut agency commission drastically, in a move that could further threaten media agencies' remuneration for buying search.

From 1 July, Yahoo! will pay 10 per cent commission to agencies spending more than £80,000 per month and 5 per cent to those spending more than £20,000. Below that, no commission will be paid.

The move has led the specialist search marketing agency Greenlight to call for all search commission to be scrapped. However, Richard Firminger, Yahoo!'s regional sales director for Northern Europe, said the new system will remain unchanged for the next 12 months.

Yahoo!'s decision will cause most problems for small agencies that do not spend enough to pass the thresholds.

Last year, Google ditched its 15 per cent commission rate and replaced it with a quarterly financial payment based on billings, which also badly affected small businesses.

According to the tracking company ComScore, Google and Yahoo! control 70 per cent of the UK search market.

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