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Monday, May 22, 2006

How Much Should You Pay For A Click?

Posted by @ 7:26 pm
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How many clicks do you get for your money?When you are looking at starting or expanding your paid search marketing campaign, it is great to know that you can get large amounts of qualified traffic for your site quickly. But it is also quite sobering to look at the cost you pay for every single click you get.

Spending several dollars per click can be quite daunting, even if you know with a sufficient amount of certainty that such an expense will still provide you with a positive return on investment. To calm your nerves in such a case, it might be helpful to know what the industry click cost averages are.

According to research by Fathom Online, the average cost per click that advertisers paid on search engines in the first quarter of 2006 was $1.39, which actually was lower than the average of $1.43 per click paid in the fourth quarter of 2005, when the busy holiday shopping season traditionally results in more aggressive keyword bidding online.

How does Fathom Online gather this data? They use their own proprietary data collection and reporting platform and monitor over 20,000 generic keywords covering 12 categories. The categories covered by Fathom Online include automotive, computing, consumer services, electronics, finance – investment, finance -mortgage, health, media and entertainment, retail, telecom – broadband, telecom – wireless and travel and hospitality.

Differences between categories can be quite large. While Fathom Online didn’t release any average category click costs for the first quarter of 2006, even the comparison of average click costs for selected categories in November and December 2005 illustrates significant fluctuations based on seasonality and economic trends.


Category Avg. Click Cost Nov. 2005 Avg. Click Cost Dec. 2005
Telecom – Wireless $0.95 $1.09
Automotive $1.38 $1.52
Retail $0.45 $0.51
Travel + Hospitality $0.97 n/a
Finance – Investment $1.80 $1.60
Finance – Mortgage $3.67 $3.30

(Please note Fathom Online’s disclaimer: This data should be only regarded as background and benchmark information, but is not suitable as a basis of financial forecasts of search engine industry revenues.)


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