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Early Reports on Panama: Encouraging

By - February 26, 2007

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I’ve made no secret of my view on Yahoo’s Panama project: I’m rooting for it, because for any number of good reasons, the world needs at least one more scaled search monetization option beyond AdWords/Adsense. Last week Gian Fulgoni, the founder of Comscore, pinged me with some interesting (but embargoed) news: Comscore has been tracking clickthrough and conversion in the first couple of weeks of Panama, and the numbers looked encouraging. He checked his numbers with Yahoo, and together they agreed to release the news early this morning.

The release is here…From it:

Using the week ending February 4, 2007 as a baseline for sponsored search click-through rates (i.e. total clicks on sponsored search ads divided by total searches) before the ranking model launched, comScore studied the two subsequent weeks of click-through data to evaluate the impact of the new ranking model. comScore’s data indicate that for each of the two weeks subsequent to the launch (ending February 11, 2007 and February 18, 2007), Yahoo! Sites experienced a noticeable lift in its sponsored search click-through rate. The week ending February 11 saw a 5-percent increase, while the week ending February 18 showed a 9-percent jump.



Also:

Another anticipated result of Yahoo!’s new ranking model is a shift in composition of total click volume from algorithmic to sponsored. The “sponsored click composition” metric (i.e. sponsored clicks as a percentage of total clicks) is critical in understanding Yahoo!’s success in improving both monetization and user experience. qSearch data show positive gains in this area, with sponsored clicks representing 10.6 percent and 11.1 percent of total click volume in the weeks ending February 11 and February 18, respectively. These data represent increases of 0.5 and 1.0 points in the weeks following the new ranking model launch.

Comscore asked me to comment on this, my incredibly insightful response: “While still in its early stages, any good news for Panama is good news for Yahoo! – and this early study shows plenty of good news.”

Yahoo’s stock response can be tracked here. And because I imagine folks will ask, no, I don’t own shares, and I make a point of not trading stocks in companies that I write about.


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9 thoughts on “Early Reports on Panama: Encouraging

  1. ZRF says:

    As Fred Wilson points out this morning: “Google’s click rates are significantly higher than Yahoo’s so a 9% gain is not going to get them parity with Google”.

  2. Keep in mind that Yahoo’s SERP shows 50% paid ads above the fold in the main results section vs. Google that shows 20% (or less) paid ads above the fold in their main section so even 11% CTR that’s insanely poor performance.

  3. Preston says:

    ZRF, I don’t think John is alluding the them becoming Google’s equal – this is more about the direction of the company and a more positive outlook for the future. Bravo, Yahoo – I hope they can eventually be a real contender (again).

  4. Kevin says:

    Interestingly, Yahoo’s sponsored ads have suddenly lost their distinguishing background color. Last week, it was light blue, like Google’s. At this very moment, they are not. That seems mighty suspicious.

  5. Kevin says:

    Apologies to all. I take that back. Yahoo’s blue is light enough compared to Google that my monitor failed to distinguish between the colors.

  6. brian says:

    All I know is, I threw a couple thousand dollars at Yahoo last week to try to new system. Zero sales. I used the same keywords that I use week in and week out on Google… only difference is, google generates 3 times my adspend in sales. Yahoo, again, generated zero. The big unanswered question for me has always been: why do Yahoo ads not generate sales?

  7. Arthur says:

    Brian, I’m with you on this one.

    One thing those comScore numbers don’t know is how Yahoo actually achieved that number. I pay for over 300,000 keywords on Google across 12 retail sites that I manage. On Yahoo’s old system, I had MAYBE half that amount of keywords being that Yahoo didn’t allow plurals and rejected a portion of my ads periodically for no reason.
    Now, with Panama, Yahoo has conveniently introduced a new tool that converts your third-party campaigns (with explicit support for Google Editor pulls) into their own format.

    Now think about it. For large advertisers, this is a blessing giving them the option to finally syndicate their Google lists to Yahoo without the laborious effort involved in converting through countless templates.

    This is where the fun stops. Yahoo has replaced their easy-to-use template with a new !31 column! sheet that renders keyword and url updates nearly impossible. I’m not even going to start on their “new and improved” UI.

    So, while the initial analysis may look promising, it’s doomed for another failure.

    My $.02

  8. Asia says:

    When I compare my Yahoo results vs Google’s, I’m getting much better results with Google.

    MSN seems to be overlooked a lot by the way – I’m getting near 50% conversions on my ads there. The beauty of MSN, is there is less demand so costs are lower. We’re also seeing a lot of return on MSN SERP’s, they seem to be highly targeted. Don’t ask me, I just work here!