Searching Beyond the Paid

Wednesday, April 04, 2007

Is Panama Really Better?

At the end of February, comScore published data showing that CTRs were up with the new ranking model in Yahoo's Panama sponsored search. Mind you, the report compares one week to two weeks, the week before the new ranking model vs. the two weeks after. I contend that this comparison is not totally statistically significant. Variations such as this can occur from week to week even without changes in ranking models or other major factors, and does not necessarily indicate a trend. With Valentines Day falling in there, I contend that the numbers are even further skewed.

All that said, most experts are agreeing with the statistics. Mona Elesseily from Page Zero Media has a good writeup of their experience at Search Engine Land. Everybody seems pretty happy with Panama and the new model.

Everybody except me. I am happy with the new interface - it's light years better than the old Direct Traffic Center, with features that even Google doesn't have, such as the Alternate Text for keyword insertion. However, our stats since the new ranking algo don't look so rosy.

Looking at our data for the same time frame as comScore, our CTR is actually down 20%. There's a caveat to that, though. We enjoyed almost a 50% increase in CTR when we converted to Panama from the old system. CTRs post-new-algo are better than they were under the old DTC. Mona claims there were problems with CTR calculations in the DTC, though, so who knows. All I know is, our CTRs plunged with the new algo.

Mona also talks about improvements in average CPC. Again, looking at the comScore time frame, our CPCs are up, not down. They're up from DTC levels, too. Cost per conversion is up significantly, as well. I attribute this to the loss of the auction and rules-based bidding. Many of our competitors weren't bidding very intelligently in the auction, which allowed us to use bid management tools and rules to get good positions at very low costs. With that gone, we've had to pay a lot more to maintain our position in the landscape. This is one reason why I wasn't in favor of the new algo in the first place!

Let me end by saying that I don't dispute the claims made by comScore or by Mona. I met Mona at SES Chicago - I'm the one who asked her how we could get rid of Canada - and in addition to being a really, really nice person, I think she's one of the top experts out there on Yahoo Search Marketing. I just think the new system isn't all roses for every advertiser or every sector.

I also realize by crunching our numbers that it's probably time for some creative testing. We've done extensive testing in Google, but not Yahoo, since it wasn't available pre-Panama. Now that it is, it's time to make use of it.

In that vein, Yahoo, when will you launch your own version of AdWords Editor? (wink, wink)


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