Yahoo!’s New Model Improves on Click-Through Rates

Reston, VA, February 26, 2007— comScore Networks released the results of a study analyzing the changes in Yahoo!’s click-through rates for sponsored search ads since the official U.S. launch of its new ranking model on February 5, 2007.  The introduction of the ranking model is the second phase in the rollout of Yahoo!’s new search advertising system, known as Project Panama.  The study is based on the online behavior of comScore’s U.S. sample of 1 million Internet users.

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.

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. 

“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,” added John Battelle, chairman and publisher of Federated Media and noted author.