Keyword Prices Sink 6%
- by Wendy Davis @wendyndavis, November 7, 2005
The year-to-year price drop occurred as search engine revenues surged this last year. Google, for instance, recently reported third-quarter revenues of $1.578 billion, marking a 96 percent increase from the third quarter of last year. The Interactive Advertising Bureau also recently estimated that search advertising revenues increased by 27 percent in the first half of this year.
Fathom Online Keyword Price Index: Year-over-Year
10/04 | 10/05 | % Change | |
Automotive | $1.39 | $1.30 | -6 |
Consumer Retail | .48 | .45 | -6 |
Consumer Services | .96 | .86 | -10 |
Travel /Hospitality | .85 | .97 | +14 |
Investment | 1.60 | 1.66 | +4 |
Mortgage | 4.31 | 3.68 | -15 |
Broadband | 1.78 | 1.63 | -8 |
Wireless | 1.06 | 1.06 | 0 |
Average | 1.55 | 1.45 | -6 |
Source: Fathom Online
The modest decline in year-to-year keyword prices indicates that soaring search revenues are due to increased inventory and increased marketer participation in paid search. "There's much more available than there was in the past," said Fathom Online's Gregg Stewart, senior vice president, channel management and marketing.
Year-to-year, the categories posting the largest declines were mortgages, which fell 15 percent to $3.68; consumer services, which fell 10 percent to 86 cents; and broadband, which fell 8 percent to $1.63.
The only categories to see an increase from October of 2004 were travel/hospitality, which rose 14 percent to 97 cents a keyword, and investment, which rose 4 percent to $1.66.
On a monthly basis, keyword prices overall rose 1 cent from September, when they averaged $1.44 across the eight categories tracked by Fathom Online. The nearly flat month-to-month pricing stood in sharp contrast to last year, when keyword prices rose 14 percent between September and October.
"We're not seeing the fast ramp-up we did last year," said Fathom Online's Gregg Stewart, senior vice president, channel management and marketing. "We're starting to see some of the seasonalities coming out of the numbers," he added.
Fathom Online Keyword Price Index: Month-over-Month
09/05 | 10/05 | % Change | |
Automotive | $1.51 | $1.30 | -14 |
Consumer Retail | .46 | .45 | -2 |
Consumer Services | .96 | .86 | -10 |
Travel /Hospitality | .91 | .97 | +7 |
Investment | 1.46 | 1.66 | +14 |
Mortgage | 3.39 | 3.68 | +9 |
Broadband | 1.62 | 1.63 | 0 |
Wireless | 1.22 | 1.06 | -13 |
Average | 1.44 | 1.45 | 0 |
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.
