Bidding drives keyword prices up
As big search engines become more popular, marketers turn to more affordable players
by Carol Krol

Words are worth more than before on leading search engines, according to many marketers.

Because search engine keywords are bought under an auction model, the popularity of search marketing—now estimated to represent about 25% of the total online ad spending for 2003 of $6.3 billion—has meant skyrocketing prices. In some cases, those prices have become prohibitive. That has prompted some marketers to spread out their spending, buying keywords at second- and third-tier search engines where keywords cost less.

More than two thirds (68%) of respondents to Jupiter Research’s Bi-Annual Search Marketing Survey, published in February, said high prices for desired keywords was their top problem in search marketing. Another 60% of respondents said heavy competition for top rankings was their main issue.

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