Cheaper Isn't Better

When it comes to selecting keywords on search engines, marketers who pay more don't necessarily get the most value for their dollars, according to a report released yesterday by DoubleClick. The report--"Search Engine Marketing Considerations," from DoubleClick search and affiliate marketing unit Performics--found that more than 60 percent of "active" keywords (that is, keywords that have resulted in at least one click in the last month) cost 20 cents or less. In contrast, keywords that cost more than $1 account for only 6 percent of those clicked on at least once a month. Higher position doesn't necessarily mean greater click volume. The report concluded that high click-volume keywords perform equally well both above and below the top three. In fact, lower-positioned keywords drive 10 percent of total conversions. Moreover, conversion rates tend to fall as cost-per-click prices exceed 50 cents. Specific findings from DoubleClick data shows: • Keywords do not need to be expensive to generate click volume. More than 60% of active keywords cost 20 cents or less; only 6% cost over $1.00. • High position keywords do not necessarily equate to click volume. There are as many high click volume keywords in positions lower than three as there are at three or higher. • On average, conversion rates decrease when CPC exceeds fifty cents, indicating a potential “law of diminishing returns” • Lower-positioned keywords still drive 10% of total conversions, suggesting there is value in developing broad keyword lists The white paper is available in its entirety at www.doubleclick.com and a complete search engine marketing trend report is scheduled for release in November. The upcoming trend report will provide even more extensive data and analysis based on complete Q3 data from more than 100 leading marketers.