bostonseo - 9:52 pm on Mar 14, 2006 (gmt 0)

pmurillo,

Couple of reasons why this might be happening, and you are not alone. My clients have seen declining conversions and escalating prices as well - others' have said the same here as well....all starting around the end of February.

Yahoo-Overture is losing advertisers at an incredible rate these days - and so people are shifted more and more of the budget to Google Adwords. When you have more advertisers competing essentially for the top 3 horizontal spots, you will see lower sales conversion percentages and higher CPC prices.

However, Google has been adjusting their CPC algorithm in their favor for some time now - and this will likely get worse before it gets better. Not much you can do really.