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CPC costs are rising, but they represent only one aspect of marketer’s costs and return on paid search campaigns. Cost per keyword incorporates click volume for a broader view of keyword ownership value, says Performics.
Though CPC prices are rising, they’re just part of the total cost of keyword ownership, according to DoubleClick, Inc., and a metric it developed, cost per keyword, provides a deeper view of that total cost by also factoring in the measurement of click volume. During the third quarter, average CPK -- derived from multiplying average CPC prices by the monthly volume of clicks generated by the given keywords – rose from $20 to $26 in DoubleClick Inc.’s Performics 50 Index.
Performics speculates that the most likely reasons for increases in both CPK and CPC during the quarter were greater competition for keywords and greater emphasis by marketers on higher-priced, higher-trafficked keywords. Reflecting that competition for top keywords and their rising cost, trend data from the Performics 50mindex also show that keyword rank distribution is changing. The proportion of keywords able to maintain the top rank for an entire month has been shrinking all year.
Correspondingly, the value to marketers of those less-than-top-ranking keywords – and their cost – is increasing, Performics found. But their total cost is rising more as a function of click volume than CPC price, suggesting that in the third quarter, they were popular among marketers for use in brand or awareness campaigns and efforts to influence consumers early in the buying process than later at the purchase stage, according to Performics.
The Performance 50 Index is a subset of the more than 150 search campaigns currently under management by Performics, including a mix of e-commerce and lead-generating campaigns.