San Francisco, January 10, 2006. The Fathom Online Keyword Price Index (KPI), which has been tracking keyword prices in eight categories consistently for the past 16 months, indicates 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. As more and more advertising money enters the search arena, overall prices in the online keyword auction have nevertheless stabilized, helped by increases in the inventory of keywords and phrases.
Once again, the category activity with its broader fluctuations tells the more accurate story of how advertisers managed their search campaigns in the last month of 2005. For instance, 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 September Retail average keyword price was $.46 showing that Q4 Retail keyword prices stayed within a narrow range until early December when they began to climb.
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, but reports of such high flyers, while intriguing, do not tell the overall story.
Telecom Wireless keyword prices climbed 15 percent to $1.09 after dropping 10 percent in November, and the Automotive sector showed a gain for the second month in a row, rising 10 percent to $1.52. Those increases were offset by drops in Finance Investment and Mortgage keywords of 11 percent and 10 percent respectively.
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,” said Gregg Stewart, SVP Channel Management and Marketing. “That synergy generates a healthy market that benefits advertisers, consumers and the search engines.”
Fathom Online tracks keyword prices daily to spot trends and to provide its clients with advantageous buying opportunities. 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.
