Fathom: Keyword Prices Plunge Nine Percent

Led by double-digit declines in the mortgage, telecom, and consumer services categories, search engine keyword prices dropped an average of 9 percent last month--to $1.50 from $1.65, according to Fathom Online. August marked the second straight month of falling prices; the average cost-per-click in July declined by 4 percent in the categories tracked by Fathom. Still, average prices were up by 13 cents, or 9 percent, since Fathom Online started the keyword price index in September 2004.

Last month, mortage-related keywords fell to an average of $3.81 a click, down around 41 percent from an April high of $6.49. Average prices for telecom/broadband-related search terms fell by 13 percent, from $1.72 to $1.49--lower than they've been since Fathom started its keyword price index last year. Telecom/wireless keywords declined by 10 percent to $1.03.

Keywords related to consumer services also experienced a large drop--12 percent, from $1.12 to 99 cents.

Showing a smaller decline were terms related to retail and investing--both of which fell by 6 percent--and travel/hospitality keywords, which fell by 3 percent.

Gregg Stewart, senior vice president for channel management and marketing at Fathom Online, chalked up the decrease to the slow summer months. "Much of it we're attributing, quite frankly, to seasonality," he said. Stewart added that the agency will be in a better position to evaluate this theory next month--when it will have an entire year's worth of data, and can start making year-over-year comparisons.

Stewart added that data gathered in the first five days of September showed a lift this month in all areas other than mortgages.

Only the automotive space posted an increase last month, rising by 13 percent from $1.49 to $1.68--the highest that car-related keywords have been to date.

Fathom Online Keyword Price Index

09/04

10/04

11/04

12/04

01/05

02/05

03/05

04/05

05/05

06/05

07/05

08/05

Automotive

1.54

1.39

1.35

1.41

1.34

1.28

1.42

1.40

1.50

1.53

1.49

1.68

Retail

.32

.48

.60

.58

.52

.46

.51

.52

.49

.53

.52

.49

Services

.54

.96

1.27

1.36

1.29

1.04

1.08

1.13

1.09

1.12

1.12

.99

Travel

.64

.85

.90

.97

.88

.81

.93

.92

.87

.88

.87

.84

Investing

1.76

1.60

1.70

1.76

1.73

1.65

1.86

2.03

1.81

1.89

1.73

1.63

Mortgage

3.17

4.31

4.74

4.79

4.93

5.10

5.39

6.49

4.52

4.66

4.63

3.81

Broadband

1.89

1.78

1.59

1.63

1.67

1.72

1.85

2.09

2.02

1.97

1.72

1.49

Wireless

1.09

1.06

1.09

1.09

.79

.77

.95

1.01

1.00

1.19

1.14

1.03

Average

1.37

1.55

1.66

1.70

1.64

1.60

1.75

1.95

1.67

1.72

1.65

1.50

Source: Fathom Online

Fathom tracks keyword prices daily. The keyword list consists of 500 generic keywords across eight categories for the top five ranked positions on selected search engines. The aggregate data contains no proper or brand names. Fathom states that the pricing fluctuations should be viewed in the context of the eight categories reported and not as a proxy for the entire search industry.

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