Search Ad Prices Down 15% In May 2005

The average price for search ads dropped sharply last month, according to the latest Keyword Price Index from Fathom Online. The average price paid in May dipped to $1.66, down 15 percent from $1.95 in April.

The mortgage category is most responsible for the plunge, Fathom says. If it weren't included, then the index drop would have been only 3.3 percent. That category in the past has also seemed most responsible for some of the rises.

Given this, the number of categories in the index "basket" may need to rise, to provide a better overall picture of the search ad price market as a whole. Alternatively, it might make sense to have one index for categories that often see significant changes versus those that fluctuate less often. At the very least, it underscores the fact that the "average" may bear no relation to what's happening within a specific industry. It's something Fathom says itself, in its latest release:

We should also stress that the pricing fluctuations measured by the KPI in May should be viewed only in the context of the eight categories reported and not as a proxy for the entire search industry.

All categories except automotive saw some degree of drop last month. After mortgages, the investing category has the biggest percent drop and change in amount paid. Other categories saw tiny changes. The chart below gives a per category breakdown:

Category

May 2005

Change From Last Month

Percent Change

Mortgage

$4.52

-$1.97

-30%

Broadband

$2.02

-$0.07

-3%

Investing

$1.81

-$0.22

-11%

Automotive

$1.50

$0.10

7%

Consumer Services

$1.09

-$0.04

-3%

Wireless

$1.00

-$0.01

-1%

Travel/Hospitality

$0.87

-$0.05

-6%

Consumer Retail

$0.49

-$0.03

-6%

Average

$1.66

-$0.29

-15%

More information on the latest figures and past stats should be posted by Fathom later today, probably here. If not, review the Fathom press release page. Below, a graphical look at the prices over time. Prices for the mortgage category are broken out from the others, so that you can better see trends:

050607-fathom