Sand - 3:54 pm on May 20, 2013 (gmt 0)
I did recover, thankfully. Traffic is now at an all time high. Here's the basic rundown of what I did:
1. Panic. Initially, I honestly felt I had done nothing to warrant the penalty. But in time I was able to step back far enough to realize that I probably wasn't adding as much value to the internet as I could have been. I eventually came to understand feeling sorry for myself wasn't going to fix anything, and took it as a risk-free opportunity to make my site better.
2. My site had become pretty big over the years, and at first I didn't know where to start with cleanup. So I started by writing a new value proposition. This was just a statement that said exactly what the goal of my site was. Then, I evaluated each piece of content against that value proposition. If it didn't fit, I deleted it and let the URL 404. This was painful but (I believe) necessary.
3. I spent 6 straight months rewriting content. What used to be 300-400 words was now 600 - 1,000 words. I got rid of all generic text (like manufacturer descriptions, etc). I also spent a lot of time coming up with ways that I could add more value. One of the things I did was surface a lot of data (both mine and 3rd party) in interactive chart form to help visitors make better decisions. This lead to more time on site, more conversions, and it also generated a LOT more links / social mentions.
4. I continued to market my site as always and continued to add new content all the time.
5. With most of my time focused on rewriting, I started paying outside experts to write new content. This was expensive, but totally worth it. The site is so much better now that there are a variety of expert voices helping people solve their problems. This is something I have continued to do.
I was hit in April of 2012, and saw the first signs of recovery at the end of August in that year. I continued to see improvement with every Panda iteration, until finally things came back to 'normal' in January of 2013. It's continued to grow each month since then.