Panama Seen As Beneficial to Brand Advertisers

  |  March 8, 2007   |  Comments

Early returns on Yahoo's new ad platform show improvement, especially for big-brand advertisers.

As more early results roll in, it appears that Yahoo's Panama platform is delivering as promised, improving ad performance for big-brand advertisers and quality of results for searchers.

The latest data to support this comes from search and media management firm SearchIgnite and RBC Capital Markets' research arm. A study of early results from clients of SearchIgnite, and sister firm 360i, showed that Yahoo's market share among those advertisers stabilized after Panama launched, ending a steady decline for the past year. It also found that clickthrough rates improved since Panama's launch, while cost-per-click has held steady.

With Yahoo's new Quality Index, which ranks ads on several factors beyond just the per-click bid price. Marketers have been able to increase their rank with lower CPCs and higher clickthrough rates. This has been especially true for large consumer marketers with recognizable brands, according to Roger Barnette, president of SearchIgnite.

"Our large brand marketers saw the biggest impact of Yahoo's Quality Index re-ranking, due to the relevance of their ads and their pre-existing brand prominence," Barnette said.

The SearchIgnite/RBC report, entitled "Early Returns From Panama," tracked more than 7.5 billion impressions and 85 million clicks across more than 500 marketers. It was compiled based on research conducted beginning in Q4 2006 and running through February 24, 2007. SearchIgnite plans to release quarterly reports on Panama, with the first one planned for April, reviewing full performance for Q1 2007.

In the short term, Panama has stopped Yahoo's slide in market share, which had been dropping steadily among SearchIgnite clients over the past year, from 46.0 percent in the first quarter of 2006 to 19.6 percent in the fourth quarter. Panama's repeated delays and the rise of MSN both contributed to that slide, Barnette said.

During the January transition period, Yahoo’s percentage of total paid search spend reached a low of 17 percent. Since Panama launched on February 5, it has held steady and risen slightly to 18.1 percent.

These early results should not be looked at as long-term indicators yet, since budgetary decisions by search marketers based on Panama results have not yet been made, or reflected in the report. The longer-term economic impact of Panama should begin to become apparent next quarter, Barnette said.

Early signs are positive for Yahoo, however. Among SearchIgnite clients, average clickthrough rates on Yahoo ads have increased by 22 percent since the fourth quarter of 2006, from 2.0 percent to 2.5 percent. During the same period, average CPCs rose only slightly, from $0.56 to $0.59. Barnette attributes the change to Yahoo's Quality Index, which has allowed Yahoo to increase effective CPM (eCPM) by showing more relevant ads at the top of the page. Yahoo’s eCPM for SearchIgnite clients jumped from $11.20 in Q4 2006 to $14.50 after Panama’s release, he said.

Among SearchIgnite's Fortune 500 brands, clickthrough rates rose significantly, from 2.3 percent pre-Panama to 4.4 percent after the platform's launch, while CPCs have dropped 24 percent overall, from $0.75 to $0.57. The effect can be seen on brand terms, where previous competition with affiliates and aggregators may have driven up costs. On those terms, CPCs have fallen 24 percent, from $0.21 to $0.16. On non-brand terms, CPCs fell 20 percent, from $1.37 to $1.10.

In addition, ads from Fortune 500 marketers have seen an increase in average ranking for non-brand terms, from an average position of 6.2 to 3.7. Barnette said this is a result of their ads out-competing others on either relevancy or CTR, both factors that increase position in the new Quality Index algorithm.

Last week Avenue A | Razorfish published similar results for Yahoo search campaigns it manages. Among that agency's clients, search impressions were up an average of 5 percent, cost per click (CPC) prices were down an average of 6 percent, with clickthrough rates up an average of 10 percent.

A longer version of this story can be found at SearchEngineWatch.

ClickZ Live San Francisco This Year's Premier Digital Marketing Event is #CZLSF
ClickZ Live San Francisco (Aug 11-14) brings together the industry's leading practitioners and marketing strategists to deliver 4 days of educational sessions and training workshops. From Data-Driven Marketing to Social, Mobile, Display, Search and Email, this year's comprehensive agenda will help you maximize your marketing efforts and ROI. Register today!


Kevin Newcomb

Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.

Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.

With a combination of real-world marketing experience and years of business journalism, Kevin brings to ClickZ a unique ability to deliver news and training materials that help online marketers do their jobs better.

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.



Featured White Papers

BigDoor: The Marketers Guide to Customer Loyalty

The Marketer's Guide to Customer Loyalty
Customer loyalty is imperative to success, but fostering and maintaining loyalty takes a lot of work. This guide is here to help marketers build, execute, and maintain a successful loyalty initiative.

Marin Software: The Multiplier Effect of Integrating Search & Social Advertising

The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.


    Information currently unavailable


    • Internet Marketing Campaign Manager
      Internet Marketing Campaign Manager (Straight North, LLC) - Fort MillWe are looking for a talented Internet Marketing Campaign Manager to join the...
    • Online Marketing Coordinator
      Online Marketing Coordinator (NewMarket Health) - BaltimoreWant to learn marketing from the best minds in the business? NewMarket Health, a subsidiary...
    • Call Center Manager
      Call Center Manager (Common Sense Publishing) - Delray BeachWanted: Dynamic Call Center Manager with a Proven Track Record of Improving Response...