Better Data on Search Pricing

Citigroup analyst Mark Mahaney spoke with about 10 major search advertisers at an ecommerce conference in Palm Springs.  The feedback on pricing was mixed, but in Mark's opinion, the exchanges were "generally bullish for search."  Specifically:

• Two of the ten said that pricing had gotten "exorbitant," but only one of the two planned to cut back spending.
• One said the hiring of an SEM firm and the use of advanced analytics has allowed it to reduce its overall spending [which suggests keyword prices can rise for a while yet].
• Several said there is far more competition for keywords than there used to be.
• Two companies directly contradicted FTD's comments about ridiculous pricing in the flower market.
• Only 20% of respondents to a survey reported that their biggest concern about search was pricing.

Mark also spoke with several multi-channel retailers who are just now beginning to explore search (incremental demand).  And he reported that FordDirect is psyched about pay-per-call, which apparently generates leads worth $30-$45 a call.  So there may be smooth search sailing for a while yet.