Pay-per-click keyword prices have been falling in many sectors for the past year or so, according to the agencies and client-side marketers whom we regularly speak with in the UK, and as evidenced by the great US-focused research published by Fathom.
In 2005, my gut reaction to falling keyword prices was that it was merely a correction. After all, growth in spending on paid-search surged massively between 2004 and 2005, driven by much competition and new entrants to the PPC scene.
New advertisers – and some existing ones - may have over-egged the cake to secure a number one listing, before revising keyword bids downwards once the resulting sales didn’t provide enough (or any) return on investment. Paid-search is seen as one of the lowest hanging fruits for those new to online marketing, and PPC virgins may simply have been a bit too gung-ho to begin with.
But maybe keyword deflation suggests something more sinister, something that isn’t purely about new entrants bidding too much to attract visitors. Falling ROI may indicate a rising number of fraudulent clicks.
Is click fraud is in fact a bigger issue than the paid-search networks are prepared to let on? And is keyword deflation the smoking gun?