Wednesday, January 26, 2005

Chicago Tribune | Web words become a lucrative market

This article discusses two of the most important aspects of keyword marketing.

First. There is a huge amount of web search taking place, and advertisers are waking up to bidding on search terms.

Second. Near top placement is critical for success in keyword marketing, and the prices for attractive search words is skyrocketing.

Businesses need a balance between keyword marketing and subscription based marketing which allows them to control over time the cost of their advertisements. The economics of traditional Yellow Pages or other directory marketing becomes more attractive as the keywords are bid into the stratosphere.

The downside for traditional Yellow Pages is that over time, more and more references may migrate online, and that could mean a dramatic shift in advertising funds.

Who wins? Google, Yahoo!, and anyone else providing quality search results. Also the companies who place the media for advertisers will be in high demand.

Chicago Tribune | Web words become a lucrative market: "TRENDS: PAYING FOR CLICKS
Web words become a lucrative market
Search results trigger intense price bidding

By Rob Kaiser
Tribune staff reporter
Published January 24, 2005

Companies swarming to have their names and ads appear next to Internet search results have created a burgeoning marketplace for search words, phrases and brand names.

Progressive Insurance pays $8.08 each time somebody clicks on its ad after searching the phrase 'car insurance.' 'Laptop' sells for $2.02 per click, while 'franchise' goes for $5 and 'Internet service provider' for $6. 'Financial help' fetches $5.76, although 'financial advice' only brings in $2.72.

The prices for such words are set through auction-style bidding in which class-action attorneys have run up the word 'Vioxx' to $16.50 per click, while 'mesothelioma,' a cancer caused by asbestos exposure, goes for $39.08.

With Americans conducting more than 4 billion Internet searches monthly, often while shopping for airline tickets, credit cards and millions of other products, companies are battling for top advertising positions on Google, Yahoo and other search engines. The competition has become increasingly sophisticated as companies learn how much business they can generate through the ads.

Similar to stocks, the prices of particular words and phrases constantly fluctuate as businesses jockey for top positions.

But the overall market has exploded, with companies ranging from United Airlines to a Highland Park teddy bear retailer spending a total of an estimated $4 billion last year on Internet search ads. That's up from less than $1 billion just two years earlier, according to PricewaterhouseCoopers LLP, which studies the market for the Interactive Advertising Bureau.

'It's done wonders for our business,' said William Burr, owner of S&W Manufacturing Co. in Bensenville, which makes indus"


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