• by Jack Loechner , Staff Writer @mp_research, February 2, 2006

As more and more advertising money enters the search arena, overall prices in the online keyword auction have stabilized, helped by increases in the inventory of keywords and phrases, tells the recently released Fathom Online Keyword Price Index" (KPI).

The report found that in December 2005 KPI averages eased, dropping two percent to $1.43 from $1.46 in November. In Q4 2005, the overall average price of keywords stayed virtually flat ending one cent lower from the September KPI of $1.44.

Gregg Stewart, SVP Channel Management and Marketing, said "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. That synergy generates a healthy market that benefits advertisers, consumers and the search engines."

Consumer Retail prices bounced back 13 percent to $.51 as consumers spent a record $19.6 billion in holiday online buying, up 25 percent over the 2004 season, according to ComScore.

The days with the highest price fluctuations, however, were post-Christmas when the bargain shoppers were out in force. Within those averages, many hot button keywords like "diamond earrings" and "Hi Def television" brought higher prices anywhere from $2.00 to $3.00.

• Telecom Wireless keyword prices climbed 15 percent
• Automotive sector showed a gain of 10 percent
• Finance Investment was down by 11 percent
• Mortgage keywords were down 10 percent

Overall, prices have dropped 16 percent from December 2004, when the average price for all eight categories was $1.70,

The keyword list consists of 500 generic keywords in each of eight categories for the top five ranked positions on selected search engines. The pricing fluctuations measured by the KPI 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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