Cost of keywords up 47 percent from September 2004

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Cost of keywords up 47 percent from September 2004

December 7, 2005

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According to DoubleClick's latest Search Trend Report, the cost of the average keyword was up 47 percent from September 2004 to September 2005.

What's more, Internet marketers and online advertisers are starting to discover new CPK (cost-per-keyword) metric terminology.

Since search engine marketing has now become such an increasingly important and critical part of most ad budgets, CPK is now as ubiquitous with media planning executives as CPMs and CTRs are.

DoubleClick's "Search Trend Report for Q3 2005" found that the average CPK as well as the average CPC (cost per click) showed steady increases throughout the third quarter.

This could be due to a number of reasons, but the report stated that the most likely factors were "competition and a greater emphasis on higher-priced, higher-trafficked keywords that give advertisers the potential for greater visibility and brand awareness."

After a precipitous rise and fall in late '04 and early '05, CPK has been rising steadily throughout the year.

During the third quarter, CPK rose from $20 to $26 in DoubleClick's index. The SEMphonic Keyword Pricing Index (SKPI), an index of cost-per-click and bids on selected industry-specific keywords, also showed a slow but steady rise across all industries in the first half of November.

In certain sections of the retail market, however, the SKPI shows keyword prices are rising more dramatically. Prices are up in kitchen, food, and wine (8%), arts and entertainment (8%) and most significantly in clothing and accessories (10%).

Comparing data from November 15 and November 1, SEMphonic noted a small rise in both top bids and average CPC, which rose from $0.49 to $0.53 on branded words, and from $0.96 to $1.00 on non-branded words. Overall, they report the average CPC rose about 4%.

A SEMphonic spokesperson said, "This shows a slow but steady rise in advertising costs as the holiday season approaches, but does not yet represent any significant jump in pricing."

Source: eMarketer

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