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Yahoo!'s new Panama advertising platform is showing some early signs of improved click-through rates, according to figures from SearchIgnite.

The search company reported that CTR had improved since the launch of the system, while cost per click had remained constant. Since Q406, average CTR on Yahoo! has risen from 2% to 2.5% among SearchIgnite's clients. 

Results from Avenue A / Razorfish are also positive. Since Panama's launch at the beginning of February, data for the company's 33 search clients revealed:

  • Search Impressions – Up an average of 5%
  • Cost Per Click – Down an average of 6%
  • Click Rate – Up an average of 10%
  • Conversion Rates – Down an average of 5%
  • Overall CPA – Up an average of 6%

Yahoo! launched the Panama system in February, alongside a new ranking model.

Like Google's ad system, it gives sponsored ads higher billing based on keyword matches to page content. In the old approach, ads were ordered only by which marketers bid most.

Yahoo! hopes the new system, which had been in development since 2005, to provide more relevant search results to users, as well as increasing earnings from ads.

A comScore study released two weeks ago tells a similar story. It sampled 1m US internet users, comparing the first two weeks after the new ad system's launch to the week before.

The study found that CTR increased by 5% in the first week and 9% in the second. Google and MSN did not record similar increases in CTR, which seems to indicate that the new system has had an effect.

It's still early days for the new system, but it seems to have cheered Yahoo CEO Terry Semel up, who claims Panama has "changed the mood and tempo of the company."

The recent loss of Friendster's business to Google won't have made him quite so happy though.

Further Reading:
Ellen Siminoff on Panama and paid search


Graham Charlton

Published 8 March, 2007 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

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