San Francisco, CA, May 1, 2007--The average keyword price paid by online advertisers declined 3.3% percent in the first quarter of 2007 to $1.46, according to the Keyword Price Index from Fathom Online, a leading provider of Search Marketing and technology services to the Fortune 1000.
Despite the modest decrease, the recent trend in keyword prices over the past three quarters has been relatively stable and is just 5% higher than the first quarter of 2006, when the average keyword price was $1.39. Since Fathom Online started the Keyword Price Index, average keyword prices have ranged from a high of $1.78 in the second quarter of 2005 to $1.27 in the second quarter of 2006.
“This quarter’s average keyword price points to a longer term trend of stable prices and consequently the growing importance of sophisticated analytics to manage integrated campaigns, rather than a focus on keyword prices alone,” said Fathom Online Chairman and CEO Dean DeBiase. “In watching keyword prices closely, it is clear that everything a company does before and after the bid is more important than any one particular keyword bid.”
Matt McMahon, Vice President of Products and Services of Fathom Online noted that arbitraging of keyword prices has become a short-term game with little growth opportunity. “Designing, measuring and managing engagement and interaction with the consumer across all channels is the next generation of marketing,” he said. “In this environment in particular, advanced marketing analytics that enable organizations to measure, test and adjust across every sales channel are now more important than ever.”
The Keyword Price Index is a weighted average of more than 20,000 active keyword prices across all major search engines covering a broad range of industries, including automotive, computing, consumer services, electronics, finance, healthcare, media, entertainment, retail, telecom, and travel. The Keyword Price Index® is designed to be a representative sample of keyword prices. Actual market prices for keywords often vary widely and depend on demand, competitive bidding and other market factors. The Keyword Price Index® should not be used to make financial projections or be considered a proxy for the financial state of the Search Marketing industry.
