Brands are paying Google more for less according to research that claims Google's pay-per-click costs have risen as click-through rates have decreased.
The research was conducted by the Institute of Practitioners in Advertising.
When Google changed its keyword policy last May, which now allows companies to bid against one-another's brand names, pay-per-click increased nearly one-third (31.6%) while average click-through-rates decreased from 28.9% to 20.9%, the research claims.
Rob Taylor, search director with BLM Quantum, said: "Certainly it comes as no surprise that there has been an increase in cost-per-click on brand terms since Google relaxed their trademark policy in May.
"Just that this can be stated with empirical confidence is a really important step for the search marketing industry as a whole.
"The fact that such a large number of agencies elected to be involved in the study shows that there is a real movement towards maturity and responsibility, and an attempt to readdress the balance of information back towards the favour of the advertisers.
"I look forward to seeing how this develops."
The IPA data was submitted by 17 agencies and provided the average monthly cost-per-click prices and click-through rates of up to 88 brands from April 2007 to December 2008.
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