A recent report presented by Fathom Online says that search engine marketing PPC keyword prices have undergone a tremendous fall in the first quarter of 2006. For example, the average keyword bid has dropped down from $1.43 in Q4 of 2005 to $1.39 in Q1 2006, according to Fathom.

It is stated that they tracked the keyword prices on a frequent basis for the past 19 months, which expanded the index this year. Also taking a look at Q4 2005 holiday season, the fall in the bids did not surprise much as the seasonal nature of advertising. However, the average bid has increased by 1.4 percent from the past two years (September 2004) inception of the KPI when the average bid was reported to be $1.37.

Despite of daily variations in the prices, the average bid prices have settled in to a predictable range. As stated by Fathom Online's VP Marketing Services, Matt McMahon." He also said "as advertisers see a more predictable keyword bidding environment, confidence in the channel grows and advertisers continue to invest further in search marketing."