Keyword Prices on the Rise for Holiday Shopping

Separate studies from the teams at DoubleClick and SEMphonic show that the cost of pay-per-click advertising campaigns is once again on the rise for the holiday season. Click prices are up significantly over the past few months with popular gift categories like electronics, entertainment and apparel experiencing steady increases.

From ClickZ's Zachary Rodgers':

DoubleClick's Performics unit reported cost-per-keyword (CPK) rose gradually in the third quarter, from approximately $20 per keyword in July to about $26 in September. CPK is a metric meant to get at the "total cost of ownership" of a term, Performics said. Not surprisingly, those third quarter increases have continued this month. SEMphonic reports marketers in several categories raised their top bids in the first half of November. Keyword costs for kitchen, food, and wine-related terms went up by 8 percent; and they rose by the same amount for arts and entertainment terms. Prices for keywords about apparel and accessories rose by 10 percent.

The article goes on to mention that the sharpest rises are taking place with less popular phrases, showing that search marketing ad buyers are finally starting to realize the power of targeted phrases. The study also suggested that more marketers are starting to embrace lower ranking pay-per-click listings as a branding tool since it's understood that these listings have much lower click-thru rates than the higher ad spots.