Reprise is a leading SEO/SEM firm, and it was recently purchased by InterPublic Group, a large advertising agency. (My company FM is working with Reprise). One of its founders, Peter Hershberg, recently sent me a report on its early interactions with Panama, and I thought I'd post some of the company's findings. If you want the full report, I will have uploaded it soon (here is the link to the PDF).

Here's the nut of the Executive Summary:

In short, while it was found to be a significant upgrade over the previous Yahoo DTC (Direct Traffic Center) system (especially for enterprise-grade clients), there are several challenging aspects of the Panama upgrade that may impede Yahoo’s ability to access the long tail of the market.

Reprise evaluates Panama along many lines of inquiry: Campaign Management (including Perfomance), User Interface, and Technology.

Reprise Media undertook an internal cross-functional study of Yahoo's new paid system from a search marketer's perspective, the findings of which are detailed here. This study examines the change that Panama brought about in day-to-day campaign production, optimization and reporting, from both front-end and back-end process perspectives. While we will mention similarities to MSN’s adCenter program, most comparisons in this report center around Google AdWords, given its position as the dominant player in the market and de facto industry standard.

On performance, Yahoo's CPCs went down, and click through rates went up. The explanations:

Yahoo was the only engine whose CPCs decreased over the time surrounding the launch of Panama. These results confirm the conclusion that quality based bidding along with more sophisticated and granular campaign structure is allowing us to improve the Yahoo account performance which ultimately results in lower CPCs.

Yahoo Search Marketing enjoyed a much higher increase in clickthrough rate, bringing it in line with our average Google CTRs. These results demonstrate that the ability to better target our audience through more direct creative, geo-targeting and a separation of search and contextual campaigns are providing us with more qualified ads which are driving the higher click through rates.

Also, conversions were down. The explanation:

While campaign conversion rates were improved on both Google and MSN, Yahoo's conversion dropped off 5%. In other words, while perceived ad relevance may have improved, the truly important metric in the campaign suffered somewhat. This may be due, in part, to the fact that with improved targeting and ad matching/ranking the distribution profiles of these sites has changed somewhat. In this situation, sites that had been converting at a high level no longer make the relevance cut off as defined by the engines. However, at a 5% variance, there is the possibility that this data is just noise - the normal variance that occurs based on a host of other external factors.

On other campaign management, Reprise does not mince words:

By imitating Google’s organization of data, Panama helps establish industry-wide campaign management standards that will benefit agencies and enterprise-level search marketers. Many of Panama’s most useful new features, such as bulk uploading, dynamic keyword insertion, flexible editorial guidelines, geo-targeting, contextual tracking and remote campaign management, are intended to alleviate scalability issues that arise with large-scale campaigns. These efficiencies, however, make Panama complex, and consequently time consuming. In many ways Panama falls short of Google in terms of ease of use, degree of flexibility and reporting options. In general, we find Panama’s handling of data vastly better than Yahoo’s previous Direct Traffic Center (DTC) platform, but still inferior to Google AdWords.

And on UI:

In order to create a platform that would scale with Panama's back-end updates, Yahoo overhauled their user interface. By implementing new organizational systems, new terminology, and new production sheets, Panama created a platform better suited to enterprise-level campaigns. Though the new UI doesn't fully streamline campaign management, it does a good job of establishing more intuitive processes. Furthermore, because Panama's UI structure mimics Google in many ways, it creates operational standards for the search marketing industry.

On Technology:

Panama's technology gives large-scale marketers the ability to more easily request and move around massive amounts of data. For that reason, Yahoo’s new API protocols may have the most significant impact of any changes made....Panama brings Yahoo in line with Google’s standardizing tools, system, structure and meta data, to create an industry standard where it was previously lacking.

Overall:

While the launch of Project Panama represents a significant step forward for the Yahoo Search Marketing platform, it does not yet address all of the
requirements of the market. Though the system makes strides towards establishing industry standard campaign structure, terminology and API
access, it often finds itself under-delivering on the actual execution of these new features.

That said, Panama is brand new. Like any enterprise-level software product, it needs time to find its footing and refine its offering. We are confident
that, with time, Yahoo’s new system will represent a very positive change for paid search advertisers.

There is a lot more in the report. If you're interested, let me know, and I'll do my best to get permission to upload it here.