February 21, 2006, 12:00 AM

Average Q4 2005 cost per keyword climbs 114% over previous quarter

The average cost per keyword rose to $54.62 in December from $25.50 in September, according to Performics’ index. Year over year, active keywords per campaign were up 58% and clicks per campaign were up 107%.


Consumers aren’t the only ones spending more during the height of the holiday shopping season. The Performics 50 Search Trend report for Q4 2005, based on an index of paid search advertising representing selected search campaigns managed by Performics, showed that the average cost per keyword rose to $54.62 in December from $25.50 in September. Cost per keyword combines the cost per click paid by the advertiser on a keyword with the volume of clicks on the keyword, measured over a month.

The quarterly report also highlighted other search trends. During the fourth quarter, the average number of active keywords in a paid search campaign increased 58% and the total number of clicks for indexed campaigns increased 107% over the fourth quarter of the previous year. “Search portfolios are expanding as marketers seek to connect with consumers during all stages of the buying cycle,” says Stuart Larkins, vice president of search at Performics. For that reason, he adds, advertisers are measuring the value of their search campaigns beyond immediate ROI alone.

Seasonal consumer buying drives down consideration of keywords further into results pages, the data also suggest. The percentage of all measured conversions that come from lower-ranked keywords increases significantly in December versus November, the report found. “Depending on the seasonality of various vertical markets, there may be opportunities to leverage these trends during other times of the year,” Larkins says.

In other findings, the report determined that nearly half of all clicks and conversions that occurred during Q4 happened in December. 40% of all clicks and 48% of all conversions for the indexed campaigns during the quarter took place in December.

The quarterly Performics 50 search trends report draws from Performics’ larger pool of paid search campaigns the 50 that most closely represent the average number of monthly clicks across all campaigns. It excludes campaigns representing the top and bottom of the ranges.

Stuart Frankel, General Manager of Performics and senior vice president of its parent company DoubleClick Inc, is speaking at the Internet Retailer Conference & Exhibition June 5-7 in Chicago in a session entitled, Affiliate Marketing: The Unsung Hero of Online Marketing.


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