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Keyword Prices Trend Downward as Search Booms

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The average price for search terms again fell, reaching $1.44 in September - their lowest point since last October's $1.55, four percent less than August's $1.50 and 26 percent less than the 12-month high of $1.95 in April, reports MediaPost, citing Fathom Online data. However, this September's $1.44 average cost per click was five percent higher than the $1.37 of September a year ago, although in some categories there was significant fluctuation during the last 12 months.

Average prices fell year over year (Sept. '04 compared with Sept. '05) in three categories: investment, down 17 percent (to $1.46); telecom/broadband, down 15 percent (to $1.62); and automotive, down 2 percent (to $1.51). But prices were up in the remaining five categories.

The categories with year-over-year increases in average cost per click were consumer services, up 78 percent to 96 cents; consumer retail, up 44 percent to 54 cents; consumer travel and hospitality, up 42 percent to 91 cents from 64 cents; telecom/wireless, up 12 percent to $1.22; and mortgages, up seven percent to $3.39.

Still, the overall growth of five percent has not kept pace with the growth of search marketing itself: 40 percent in adspend in the first half of this year alone. "We continue to see more volume being pumped into this basic commodity market of words and, as volume increases, prices tend to stabilize," Fathom Online's Gregg Stewart, SVP for channel management and marketing, is quoted as saying.

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