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Average Pay-per-click Bid Prices Up 11% from March to April

Kristen Fowler Lindsey - Thursday, May 12, 2005

Wow. Pay-per-click bid prices continue to rise. The Keyword Price Index from Fathom Online reported an 11 percent increase from March to April to an average of $1.95. This is a continuing trend of bid price inflation that began getting a lot of attention last Christmas holiday season, when the growth in the number of advertisers using PPC and the tight, competitive holiday shopping season created drastic bid price jumps.

According to Fathom, the sector primarily responsible for the increase was finance, with mortgage refinance advertising showing the biggest jump.

It is important whether you are planning a pay-per-click campaign or are already conducting one to anticipate price increases. Small businesses are coming online in ever greater numbers and will slowly but surely ensure that costs will rise, because search ad inventory is relatively static.

Consider some additional factors as well -- if you have a seasonal sales fluctuation in your industry, then be sure to put aside for a price increase at that time. The summer travel market for Alaska is a good example of a business category with heavy seasonal fluctuations.

Keeping tabs on your competitive market will also help you stay on top of costs. If a large competitor suddenly comes online with Pay-per-click and has deep pockets, be prepared for inflation.

Active management of your pay-per-click advertising is critical to getting the most for your money.

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