JANUARY 19, 2006
Are you paying too much for keywords? Maybe. According to one source prices are easing somewhat.
Eighteen months ago Fathom Online began tracking keyword prices in eight categories. The average of all the prices tracked is summarized in their Keyword Price Index (KPI).
In December 2005, Fathom reported that the average KPI dropped 2% in one month — down to $1.43 from $1.46 in November.
There was a great deal of fluctuation between categories. Telecom Wireless keyword prices climbed 15% to $1.09 after dropping 10% in November, and the Automotive sector showed a gain for the second month in a row, rising 10% to $1.52. Those increases were offset by drops in the prices paid for Finance Investment and Mortgage keywords. These fell 11% and 10% respectively.
Overall, prices fell by 19% between December 2004 and December 2005. In the former month the average price for all eight categories was $1.70, partially attributable to a $4.79 average keyword price in the Finance-Mortgage category. The December 2005 price for that category was $3.30, confirming reports of a gradual slow down in the housing market.
In Q4 2005, average keyword prices fell only 1%, with the KPI moving from $1.44 in September to $1.43 in December. This downward trend sharply contrasted the 2004 trend, when keyword prices rose 24% in the fourth quarter.
Regardless of the price of individual keywords, Fathom Online's Gregg Stewart told MediaPost that his agency sees continued growth in search volume, "The pie is still increasing pretty dramatically.".
After noting that more advertisers, especially in the business-to-business arena, are entering the space, Mr. Stewart concluded: "As the keyword and phrase inventory continues to expand, average prices stabilize, and we see both advertisers and consumers learning to refine their search keywords for more relevant results."
