Ok, so like always, every time google comes out with a new algo update, I become obsessed with it in trying to understand it as much as possible. I have taken on clients for free in an effort to learn about panda and recover them, usually on a paid by performance basis.
We know that panda mainly targets sites with a lot of pages and I am seeing that as well. Some of my theories may have been mentioned elsewhere but some of them have not. This is what I have seen from my own experiences. Of 9 clients I have worked with, 4 of them have made some sort of recovery. There were 11 test subjects but it turns out that 2 I did not feel were effected by panda, but a regular google penalty.
Rewritten Content - When you mention the term "unique content" most webmasters generally think of content that is not plagiarized from another source. Technically, paraphrasing an existing article usually passed for unique content. Not since google panda came along. Years ago one of my sites was mentioned on a very popular blog. After that story was published many other small blogs started writing about my site. It was essentially the same article just reworded. That is no longer considered unique content. Writing about a story thats already all over the web no longer does you any good. If your entire site or the bulk of your site deals with writing about popular stories that you did not start, you could be a target for panda.
all pages look visually similar - Look at any content farm and you will see page after page of just text. It is just paragraphs and essays of boring text that is all unique, usually written by a freelance writer at very low cost per word. You know how google says "do you have any graphs to support your argument?". Well in one case, I added dynamic feature rich graphs to a portion of the pages of a panda hit site as needed. This added life to every page and made every page visually better. On other sections I advised the client to add videos, images and anything else that would improve the usefulness of each page and that client has recovered over 60% of their lost google traffic within 2 months. She is still applying these rich media snippets so I think her recovery will continue to improve. Not only that, her bounce rate has improved from an average of 46% over the last 3 years to 35% over the last month. Videos and images are starting to prove very useful especially in my early tests. I have not did too much testing in this regard but this just makes sense so thats why I am listing it here.
Too many auto generated pages vs high quality content pages - If your site automatically generates content or you have a ton of user generated content, you may be in trouble. User generated content left un-moderated can cause big quality concerns for your site. If your site is a UGC type of site that is fine, just make sure you have some useful articles as well. This is also a big cause of empty/shallow content pages.
poorly placed content, ads given prime real estate over actual content - Where your content is located is a big deal right now. What is your intention for your visitors? Do you want them to browse your site and read your articles, or do you want them to click your ads? If you're giving priority placement to your ads over your content, you deserve to be pushed back. If your only intention is to get your visitor to another site then your site is just essentially a doorway page that users can do without.
Content Intention -What purpose does your content serve? Google has made it well known they don't want anyone to try to manipulate their SERP's. Over optimization is a real issue and it plays a role in panda. Do you have to scroll all the way down on your homepage to view a welcome paragraph? That's not very welcoming is it? Is your welcome message really a welcome message or is it a place just to stuff your money keywords?
A lot of time went into this and I usually hate sharing information with strangers that I put a lot of time into but I am just paying it forward. Thanks to tedster sharing his experiences, helped me become very successful so I feel I owe it to him and this community.
It is very possible to recover from panda. Its hard to get a 100% recovery but the more you improve your site the better your chances are at recovering traffic. Not only will you recover traffic by improving your site but your site will be of better quality, users will be more likely to link back to it, conversions will improve, bounce rates will go down etc.
I have one client who I was unfortunatley not able to recover at all in fact he took an even bigger hit since working with me. However, we improved his site and he recovered his sales so that he is almost making as much money as before panda hit. If he ever recovered from panda he will be earning much more than pre panda. There is more than one way to recover. Alternative traffic sources is also a great place to start. Get up a facebook page a twitter page a free iphone app etc. Be creative and beat google.