Keyword Prices Sharply Up

Keyword Prices Sharply Up

DECEMBER 7, 2006

Source: eMarketer (http://www.emarketer.com/Article.aspx?1004349&src=article2_newsltr)
Online advertising is up, and so is the cost of keywords. According to 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.

That, however, did not jibe with an InsightExpress survey of media executives. Comparing the second quarter of 2006 to the first quarter, 44% of them felt they were paying more for keywords.
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Now things seem to be coming back in line.

In the third quarter of 2006, Fathom found that the average keyword price paid by online advertisers had increased 16.5% percent to $1.48.

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"Keyword demand is up as organizations have increased their online advertising budgets and expanded their search marketing capabilities," said Dean DeBiase, CEO of Fathom. "Both online advertising and search marketing are becoming strategic components of the overall marketing mix because of their growing effectiveness."

In November, the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) estimated that Internet advertising revenues in the third quarter of 2006 rose to a record $4.2 billion.

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Obviously, since many organizations are managing as many as 5,000 keywords, an average of 9 cents more a word adds up.