December keyword prices again declined compared to December of last year, dropping from $1.70 in December 2004 to $1.43 in December 2005. Only the Automotive and Travel categories’ keyword costs increased over the period. Here is a list of keyword categories and their price changes as reported in the recent Fathom Online study:
Consumer Retail -12%
Consumer Services -35%
Travel /Hospitality +2%
The sharpest declines appeared in the consumer services and mortgage categories, with 35% and 31% decreases respectively.
Even though keyword prices fell, overall spending on internet advertising continues to increase. The expanding market shows that thorough keyword selection is more important than ever for search marketers. While the prices of more generic, basic terms continue to rise, these figures show that the rapid addition of more specific keywords is pulling average category prices down overall. While the more specific keyword terms and phrases cost less, their seemingly infinite variety means that they outweigh the generic terms in total.
Users who know exactly what they want, and whose increasing experience with search helps them trust that their specific keyword searches will yield the results they want, will probably get more and more specific in their searches over time. The volume of searches on very specific keyword terms and phrases will therefore increase. Marketers must bid on specific terms in order to convert this highly targeted traffic.