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New Report Reveals Q1 Impact of Yahoo! Panama on Marketers

SearchIgnite and RBC Capital Markets jointly issue report evaluating the impact of Panama on marketers’ spend

ATLANTA, GA – April 16, 2007 – New research from SearchIgnite and RBC Capital Markets examines Q1 results of the impact of Yahoo!’s new advertising platform, dubbed Panama, on marketers.

SearchIgnite, a leading search and media management technology provider managing more than $200 million annually in paid search, teamed up with RBC Capital Markets, whose research arm methodically covers Yahoo!, to track the results of Yahoo!’s new advertising platform which launched in early February. The companies jointly published a white paper today entitled “Yahoo Panama and the Broader Search Landscape: A Q1 2007 Competitive Review,” revealing some key findings:

While Yahoo!’s market share for paid search advertising dropped precipitously in 2006, its share has continued to stabilize since Panama’s debut.

Big brand marketers have benefited most from the Quality Index as measured by a 37% decrease in cost-per-click. The Quality Index measures the expected relevance of an ad based on factors such as its historical click-through rate (CTR). Before Panama, ads were just ranked based on the highest bid. Since Panama’s launch, both the bid price and the Quality Index factor into how a marketer’s ads rank.

While Yahoo’s new quality index ranking algorithm has improved its ability to monetize its search listing pages, it still lags behind Google in this area and in fact is losing ground.

Google’s changes to its Quality Score algorithm in Q1 resulted in a better-than-seasonal showing in CTRs. Consequently, Google’s March 2007 eCPM (effective revenue generated by Google per thousand ads impressions served), did not contract seasonally this year as it did in 2006, declining by only 4.6% from February to March, compared with a 24.7% drop in the identical months in 2006.

The report, which tracked more than 14 billion impressions and 144 million clicks across more than 500 marketers, was compiled based on research conducted beginning in 2006 and running through March 31, 2007.

"Already the leader in online display ads, Yahoo invested in Project Panama to improve the relevancy of its search platform. Now Google is investing billions in DoubleClick to improve its display advertising offering. The two companies are more similar today than they’ve been in years,” said Jordan Rohan, Managing Director and Internet analyst at RBC Capital Markets.

“Yahoo has definitively stabilized its share of the search marketing pie with the release of their new Panama platform. The next step is to scale their platform by generating increased consumer search demand,” said Roger Barnette, President of SearchIgnite.

This is the second in a series of quarterly reports that tracks results from Panama. Subsequent reports will start to reflect budgetary decisions that search marketers are making regarding their budget allocations across the major search engines, reflecting the longer term economic impact of the Panama release. For a free copy of this initial report, visit www.searchignite.com.

About SiteParker
SearchIgnite is a leading search bid management and portfolio optimization technology that uses complex algorithms to help marketers and advertising agencies achieve their ROI metrics across all the major engines. With comprehensive proprietary campaign measurement and optimization tools, SearchIgnite provides advertising agencies and sophisticated marketers with a single dashboard to manage multiple simultaneous campaigns in real time. Using a portfolio approach, SearchIgnite provides the tools to maximize campaign effectiveness across multiple search engines based on each client’s business objectives. SearchIgnite is a trusted advisor to all the major engines, and sits on Google, Yahoo! and MSN’s prominent Technology Councils. For more information on SearchIgnite, please visit www.searchignite.com.

About RBC
RBC Capital Markets is the corporate and investment banking arm of RBC and is active globally in debt origination, sales and trading, foreign exchange, infrastructure finance, structured products, metals and mining and energy. Its North American equity underwriting, sales, trading and research business dominates the Canadian market and supports a significant and growing franchise in the U.S. middle market. Bloomberg ranks the firm as one of the Top 20 investment banks globally. In terms of assets, RBC is the sixth-largest bank in North America.

Contact: Sarah Hofstetter
SearchIgnite
212-703-7220
sarah@kayakcorp.com

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