Study: Keyword Prices Get Cheaper After Holidays

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Search engine keyword prices dropped an average of 3 percent from December to January, according to a new study.


Fathom Online, San Francisco, found that in the month after the 2004 holiday season's $23 billion online shopping period, the prices that advertisers paid for keywords dropped as search engine queries remained strong.


The price drop reflects that advertisers purchased "seasonally" for the holidays, then again seasonally in January, when automotive and consumer travel keyword prices dropped in a temporary lull, preparing for the big spring market.


"I would guess that advertisers are regrouping, looking at inventory levels after the holidays and doing some limited [keyword] buys," Fathom CEO Chris Churchill said.


Some categories' keyword search prices shifted drastically from December to January. In telecom and wireless products and services, keyword prices dropped 28 percent, possibly reflecting the trend to give cell phones as gifts during the holidays, according to Fathom.


Also, the consumer-retail category, typically stronger during the holidays, dropped 11 percent, from 58 cents to 52 cents per keyword. Mortgages maintained the highest keyword cost of any category, hitting $4.93 per keyword in January compared with $3.17 in September.


"As mortgage rates drifted downward, mortgage companies apparently seized the opportunity to persuade homeowners and first-time buyers to refinance or purchase properties, which increased the cost [of keywords]," Churchill said.


Fathom tracks keyword prices daily and tracks the top 500 popular generic keywords in eight marketing categories.


In other search news, a study by The Kelsey Group, Princeton, NJ, predicts that the local search marketplace will grow to $10.9 billion globally by 2009. It provides research and analysis on yellow pages, electronic directories, small business advertising and local search.


The U.S. share of this market will reach $5.1 billion, including $3.4 billion for local search, $1.3 billion for Internet yellow pages and $400 million for wireless platforms.


Christine Blank covers online marketing and advertising, including e-mail marketing and paid search, for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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