Search Keyword Prices & Trading Strategies

The average price paid for search keywords dropped 3% in January. Leading the way down were telecom/wireless-related keywords, which were off 28%, according to researcher Fathom Online. While this was mostly seasonal and therefore predictable, somewhat more interesting was the bidding frenzy around mortage-related keywords, which continue to climb as mortgage-lenders try to convince consumers that rising rates mean that time is short, etc. etc.

To turn this on its head somewhat, however, I’m betting that there are people in various stages of incorporating this sort of information into trading strategies. Given that it is possible to track keyword price changes in something approaching real-time, and given their obvious correlation with the fortunes of sectors and companies — not to mention being a kind of leading indicator — I can imagine various trading strategies involving keyword prices, including incorporating them into quants’ multi-factor models.


  1. KEYWORD FUTURES…much more interesting than plain old stocks….when will an exchange let me bet on the future value of keyohrases?

  2. Keyword Stock Index?

    Paul Kedrosky hypothesizes that there could be a financial model built around the trend in category keyword prices and the stock market segment. Interestingly enough, I have had several calls from investment firms and hedge funds over the past few…

  3. Really interesting and one of the few postings I have seen on the link between PPC costs and revenues. If the market is operating efficiently we should expect a maximum price to emerge for some terms related to the expected revenues generated from the clicks. I wonder if overall revenues for a ecommerce venture could be estimated from the price they are willing to bid.