Just three days ago, David Kaplan wrote about the incredible growth in Yahoo’s click-through rates since implementing Panama, its new ad relevance system.

Click-through rates on Yahoo ads rose 5 percent in the week after Panama’s debut on Feb. 5 from the week before, according to ComScore. The rate rose 9 percent the following week.

An increase in click-through rates approaching double digits means big money for Internet search giants these days. According to a Bloomberg survey of analysts referred to in an article by Jonathan Thaw, Yahoo’s looking to post net sales of $5.47 billion this year, and the jump in click-throughs could translate to 20% growth in revenue from searches in the second half of the year.

A similar jump for Google would have even greater impact: the same survey is suggesting the search behemoth may post net sales of $12 billion, more than twice that of Yahoo. My phenomenal powers of intuition tell me this may be a key motivator behind Google’s push towards personalization.

Panama is obviously showing its effectiveness, particularly compared to Yahoo’s old system. But the software, like Google’s personalization technology, still relies on external indicators to gauge relevance. Thaw explains it:

Panama makes ads more relevant to search queries and more likely to be clicked on. It does this by taking into account how many times ads are clicked — a measure of their usefulness –as well as the price companies bid for their spot on the search screen. Previously, Yahoo ranked ads based solely on the price bids.

Yahoo’s looking at history and demand. Google’s looking at history, context, and demographic. Neither of them is getting to the heart of the matter—which is to say, neither of them is getting to the heart of the user.

History-based relevance relies on you having visited multiple times already. You have to have searched for beetle 10 times and clicked on the car 10 times for it to understand you don’t want the insect. Given the range of topics you may be searching on, that’s a massive amount of information to have to build in order to make even half of your searches relevant.

History’s effectiveness lies in its familiarity. You arrive someplace you recognize; it feels comfortable.

Imagine, though, if you arrived someplace new, and felt like you were already at home. That’s the effect you get from a technology that understands who you are at your core.

By seeking to understand your inner drivers, your purpose and values, VortexDNA doesn’t rely on the previous sites you’ve visited. Instead, it suggests those sites that are most aligned with the mathematical expression of who you really are.

Right now, MyWebDNA is proving to improve the relevance of Google search results. As Thaw demonstrated, even a 2% increase would translate to hundreds of millions of dollars for the search giant.

Google, don’t you find that kind of relevance… relevant?

This entry was posted on Thursday, March 29th, 2007 at 11:17 am and is filed under Search, Google. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.