After rising steadily from September through the end of the year, average keyword prices continued to fall last month, according to the most recent Fathom Online Keyword Price Index, released today.
In February, companies purchasing sponsored search listings saw prices decrease by about 2 percent from January; this drop-off follows a 3 percent decline from December to January. The drop was
steepest for marketers of consumer services, such as movie ticket sellers, hairdressers, and the like. Keywords in that category fell 19 percent, from an average cost-per-click of $1.29 in January to
$1.04 last month. Consumer retailers also saw a 12 percent decline, from 52 cents a keyword to 46 cents--and travel marketers saw a drop of 8 percent per keyword, from 88 cents to 81 cents. But
keyword prices in all three of those categories were still close to average prices in October, immediately before the holiday season. Matt McMahon, executive vice president for corporate
development at Fathom Online, said the decrease in consumer and travel categories was not surprising, given that the first quarter tends to be a time of retrenchment, compared to the holiday season.
"It's trending the way we would expect it to trend right now, given that there's usually a fall-off in Q1," said McMahon. Overall, the highest keyword prices were for mortgage sites, where the
cost-per-click averaged $5.10. That price represented an increase of 3 percent from January, and 60 percent from the $3.17 average in September, when Fathom first issued its index. McMahon attributed
the price escalation to continued low mortgage rates: because consumers are still interested in buying or refinancing homes, marketers are willing to pay top dollar to reach them. Wireless
keywords, which experienced a 28 percent decline the month before, held relatively steady with just a 3 percent drop off. Still, average cost per click for wireless keywords is down to just 77 cents,
from $1.09 in September. McMahon had no explanation for the decline. "It's one of those curiosities," he said. "Oftentimes in marketing, there's a lot of unexplained events." McMahon added that Fathom
was examining possible causes for the decline, such as an advertiser leaving the market, mergers between companies, or even bad stock news.
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Fathom
Online Keyword Price Index
| 09/04 | 10/04 | 11/04
| 12/04 | 01/05 | 02/05 |
| Automotive | 1.54 | 1.39 | 1.35 | 1.41 | 1.34 | 1.28 |
| Retail
| .32 | .48 | .60 | .58 | .52 | .46 |
| Consumer Services | .54 | .96 | 1.27 | 1.36 |
1.29 | 1.04 |
| Travel/Hospitality | .64 | .85 | .90
| .97 | .88 | .81 |
| Finance/Investing | 1.76 | 1.60 | 1.70 | 1.76 | 1.73 | 1.65 |
|
Finance/Mortgage | 3.17 | 4.31 | 4.74 | 4.79 | 4.93 | 5.10 |
| Telecommunications/Broadband | 1.89 | 1.78 | 1.59 | 1.63 | 1.67 | 1.72 |
| Telecommunications/Wireless | 1.09 | 1.06 | 1.09 | 1.09 | .79 | .77 |
| Overall
Average | 1.37 | 1.55 | 1.66 | 1.70 | 1.64 |
1.60 |
| Source: Fathom Online. Indices are based on a weighted average of bid prices of the top five ranked
positions across U.S. Tier I, II, and III Search vendors of keywords within a search engine marketing campaign. The industry keyword list is composed from the 500 most queried keywords within an
industry. The keyword list does not include brand keywords. The index's goal is to represent a typical search engine marketing industry campaign and track the cost per click over time without being
subjected to abnormal search activity due to random events regarding well-known industry brands. |
