San Francisco, CA, December 5, 2006--The average keyword price paid by online advertisers reversed a downward trend and increased 16.5% percent to $1.48 in the third quarter, according to the Keyword Price Index from Fathom Online.
In the second quarter of 2006, the average keyword price was $1.27, down from $1.39 in the first quarter of the year.
“Keyword demand is up as organizations have increased their online advertising budgets and expanded their search marketing capabilities,” said Dean DeBiase, Fathom Online chairman & CEO. “Both online advertising and search marketing are becoming strategic components of the overall marketing mix because of their growing effectiveness.”
The KPI confirmed short-term and long-term trends toward higher keyword prices. In November, the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP said that Internet advertising revenues in the third quarter of 2006 rose to an estimated new record of $4.2 billion. Third quarter revenue is a 33% increase from $3.1 billion in revenue from third quarter of last year and a 2% increase from nearly $4.1 billion in revenue in the second quarter of 2006. In July, JupiterResearch said total U.S. online advertising spending is expected to rise to $25.9 billion by 2011.
