Contextual Ad Prices Falling?

Thanks to Stuart for alerting me to this report into keyword prices on contextual ad systems titled – Are Internet Ad Prices Slipping?

The figures are from a semi regular (quarterly or monthly?) report from Fathom Online (see their 7 Nov press release) into what keyword prices are doing in different industries. You’ll see from the following image that most industries saw falls in October, the exceptions being Travel/Hospitality (14% increase), Finance/investing (4% increase) and Wireless (no change).

The decrease of 6% in the Consumer Retail area could explain some of the recent decreases that I’ve seen in Adsense earnings.


So is the bottom falling out of the market? I wouldn’t jump to that conclusion just yet – for one I seem to remember this time last year click values decreased before some pretty nice increases in the two months leading up to Christmas. I’ve illustrated this below showing the shape (no actual figures) of my click values for one of my blogs. You’ll see a bit of a dip in the cpc

Perhaps what we’re seeing here is a lull before the storm. It could also be a reaction to some new contextual ad systems entering the market (like YPN and MSN’s options).

I wouldn’t be panicking and jumping off the contextual advertising bandwagon yet.

Cost per click on one of my blogs with last October highlighted (figures deleted to comply Adsense rules).


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  1. Maybe this is just a reflection of greater advetising options in the market (aka competition).

  2. khurrum says:

    Is there some way for ad publishers to know who pays the highest so we could switch to whom ever gives us the best deal?

  3. Darren Rowse says:

    not that I know of khurrum

  4. khurrum says:

    oh okay :) thanks.

    It must be tricky to keep both advertisers and publishers happy especially with the increased ad network competition.

  5. Jon says:

    The prices of ads will fluctuate in accordance with what the advertisers get out of the traffic and the general internet economy. If sales are up so will the ad prices; ads are just a piece of the puzzle.

  6. Anthony says:

    I agree with Jon, general consumer confidence has been down in most economic regions in the last few months so it would seen only natural that if retail sales/conversions are lower than normal then total advertiser spending in these areas might have been pulled back to reflect the change in consumer sentiment.

  7. Doug says:

    Yeah, well just take a look at the numbers too. It’s only -6% and 15% of the loss was on Mortgages/financing. And interest rates are rising and that industry is slowing. Duh. :-) That and the seasonal lull make me think there’s not a thing to worry about. Still, I would almost expect a slight drop due to all the Adsense clones coming out, so this is actually very good news given the context of the “losses”.

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