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.