As Reported by Efficient Frontier, below is a look at the average cost-per-click in major paid search marketing campaigns by vertical industry for June 2008, compared to May 2008.The vertical industries with the most fluctuations were Mortgage, Travel, Retail and Finance.
Full coverage of the data in the report can be found at www.SearchEngineWatch.com or on Efficient Frontier’s Blog here.
From an online marketer’s perspective, here are factors that can cause cost-per-click data to fluctuate:
- More advertisers entering the market
- More aggressive bidding to maintain positioning
- Better quality search ads and quality score as determined by the search engine
What do these micro-changes in price reveal to Marketers about current business trends?
In this report, Mortgage advertisers experienced a 12% increase in average cost-per-click which can be interpreted in several different ways:
- Are more mortgage advertisers shifting dollars from other offline tactics like print, TV and Outdoor?
- Is the increase the result of projected increases in real estate activity during summer months?
- Have mortgage leads become more valuable due to lower demand? (Thus causing higher cost-per-click tolerance)
It’s interesting to view these verticals both together and apart. Each one moves by virtue of micro and macro forces. So when you analyze each vertical you can start with micro and say, for instance, “Oh, this happened because a major industry player went out of business or withdrew from a major market.” But the macro force is always present, taking out the weaker players or causing forecasters to advise the major player to get out. There might not be an easy or intuitive explanation of why mortgage bids are up twice the rate of insurance and retail. Today’s snapshot shows certain relationships between mortgage, retail and insurance, but what’s it look like over the long run?
Isn’t that an econ mantra? “It’s the long run that matters.”
Your blog is interesting!
Keep up the good work!