The first option is its Tune Up Campaign feature. With this option, Yahoo! will perform an analysis on your account that takes into consideration several factors, such as performance history, your budget, and a chosen metric (either impressions or clicks). You will be presented with a list of suggested changes to your campaign, which you can either accept or deny. To initiate a campaign tune up, click the button on the campaign detail screen labeled "Tune Up Campaign".

Yahoo! also has a campaign optimization feature which automates ongoing bid management. The difference between campaign optimization and campaign tune up is that optimization is an automated ongoing process, whereas a campaign tune up is a one-time event. With optimization, you specify your monthly budget and Yahoo! will modify your campaign based on either a "conversion funnel" or a "business objective".

The conversion funnel option spends your campaign budget based on a set of priorities that you set. These priorities include customers seeing your ad, customers clicking your ad, and conversions. Yahoo! provides a scale that runs from "Not important" to "High". Specifying an importance level for each priority will cause Yahoo! to adjust bids differently.

For example, if your main goal is visibility by displaying your ads to as many people as possible, you would set the "Customer seeing your ad" option to a high priority. If generating conversions at a target cost is your top priority, you would set the campaign conversion priority to high and specify your target conversion cost. You can also set a target return on ad spend as your high priority event.

The business objective optimization option lets you specify the value for a parameter: your target cost per click, cost per conversion, or cost per thousand impressions (CPM). It is very similar to the conversion funnel option but is more straightforward. There is no setting of priorities - just a dollar amount for the most important parameter.

If you have conversion tracking in place and know exactly how much you can afford to pay per conversion, or what you can pay to generate the most total conversions at maximum profitability, then you should use the cost per conversion option. Ultimately, that is the most important parameter - what it costs to get a new customer or qualified prospect.

We have found Yahoo!'s campaign optimization feature to work reasonably well once it has run long enough to make the necessary changes. They are definitely worth a try. However, it would be a serious mistake for you to just set it and forget about it. It may be the case that Yahoo! technically does what you told it to do, but it could end up producing the wrong results. For instance, you might specify a target cost per click, which Yahoo! achieves, but it could shrink your total traffic so much that it becomes pointless. So keep an eye on things to make sure that Yahoo! is making adjustments that are going to help you reach your goals.