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May 22, 2009

SEO vs Paid Search

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When people hear about internet marketing, they often think of two of the more popular methods used to enhance visibility on the web, namely search engine optimisation (SEO) and pay-per-click advertising (paid search).
In an ideal world both should be used strategically to maximise your site’s profile and ROI.
Search Engine Optimisation
As many recent studies have shown, search engine optimisation offers several distinct advantages over pay-per-click advertising campaigns.

1.Tendency to Click

Numerous studies show people are less likely to click on paid search ads as opposed to organic search results.
For example, one study found that search users are up to six times more likely to click on the first few organic results than they are to choose any of the paid results (Oneupweb study), while an eye tracking study showed that 50 percent of users begin their search by scanning the top organic results. Other studies have shown that only 30 percent of search engine users click on paid listings, meaning 70 percent click the organic listings (Are Corporate Web Sites Optimized for SEO?).
2.Trust
Crucially, studies show that people trust organic results more than paid results.
The “An Examination of Searcher’s Perceptions of Nonsponsored and Sponsored Links During Ecommerce Web Searching” by Bernard J. Jansen, reported:
“The major reason for not examining sponsored links was lack of trust.”
Another study found that only that only 14 percent of searchers trusted paid listings, with 29 percent saying they were “annoyed” by them. (eMarketer)
3.Value of visitors
Search engine results tend to be seen as non-biased and are therefore able to provide visitors who are deemed more “valuable” to the organically listed sites. According to the “Are Corporate Web Sites Optimized for SEO?” by Paul Bruemmer, recent trends show that more sales originated in organic search listings than paid listings. We see this across the majority of our clients where organic traffic conversion are significantly higher than paid conversion rates- sometimes up to 3-4 times better conversion rates have been observed.


Search-Engine-Marketing

Photo by Danard Vincente via Creative Commons


4.Relevance

Users also have rated organic search engine results as more relevant than paid results. “An Examination of Searcher’s Perceptions of Nonsponsored and Sponsored Links During Ecommerce Web Searching” by Bernard J. Jansen, also found:
• “Participants rated 52% of the organic listings as relevant compared to only 42% of the sponsored listings”
• “When using a Web search engine for e-commerce searching, searchers will evaluate organic links as more relevant than sponsored links”.
• “Summary [?"description" meta tag] (42%) and Title [tag] (41%) were the primary bases that searchers used to determine if an organic link was relevant. Title (60%) was the primary basis for determining that an organic result was not relevant. Interestingly, iProspect, Survey Sampling International, WebSurveyor, and Stratagem Research reports:
“On Google, 72.3 percent of users felt that organic results were more relevant, while only 27.7 percent of users rated paid results as more relevant. Yahoo offered similar results, with 60.8 percent of users calling organic results relevant compared to only 39.2 percent of users for paid.”
5.Long Term Results
While a pay-per-click campaign may produce results more quickly than a search engine optimisation campaign, search engine optimisation campaigns can give results that last.
Paid Search
While the above statistics may make search engine optimisation seem the clear choice in all cases, it is only half of the story. In certain situations it actually makes more sense to do pay-per-click advertising.

1.Immediate Results

As stated above, results from pay-per-click advertising are immediate. On the other hand, a search engine optimisation campaign may take months for results to be apparent.
In this case, pay-per-click is advantageous for those who are looking to promote an initiative that will go live in a short amount of time, or whose business is seasonal in nature and who only do promotion during certain months of the year.
2.Type of search
The type of search is key as to how users interact with search results.
An Examination of Searcher’s Perceptions of Nonsponsored and Sponsored Links During Ecommerce Web Searching” by Bernard J. Jansen found:
• “If the e-commerce query is general, the searcher will be equally likely to view either organic or sponsored links.”
• “If the e-commerce query is location specific, the searcher will be less likely to view a sponsored link.”
• “The participants viewed more sponsored links for brand-specific queries than for general or location queries. If the e-commerce query is brand specific, the searcher will be more likely to view a sponsored link.”
• “If the e-commerce query is location specific, the searcher will be less likely to view a sponsored link.”
3. Small initial investment.
The search engines generally don’t charge a fee to place or run your advertisement. You only pay for the users that click through on the ad
4. Budget flexibility.
PPC advertising allows businesses of all sizes to advertise and reach their target customers. Because setting budgets and cost-of-traffic acquisition is under their control. Therefore, small businesses can also take advantage of PPC marketing to reach their target customers, both in domestic and international markets
5. You can experiment cheaply.
The good thing about advertising on Google is that you don’t have to create a huge budget for advertising, you can throw as little money as you want, experiment efficiently, get the ratios where you want, and then expand.
Conclusion
Clearly, search engine optimisation has some distinct advantages over paid search. However, there are certain situations and scenarios where pay-per-click advertising makes better sense strategically.
That being said there has been a recent study concluded by Hitwise that shows the decrease of paid search over the past year.
The bottom line is that businesses should not rely solely on one or the other, organic or paid, but need to tailor their approach based on their business, driving the highest converting traffic and the highest return on investment traffic to their site.

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No responses to “SEO vs Paid Search”

  1. PPC Wizard writes:

    Solid analysis and conclusions. Nothing new or groundbreaking here. However, I question how many search users are actually able to discern between paid results above the organic results (on the left side)? A #1 paid ad on the left side, above the organic results, probably looks “organic” to an awful lot of users.

  2. Internet Marketing Blog writes:

    Slightly biased towards SEO I would say, but some good insight and observation all the same.
    From my own experience as a searcher who understands the results I would say I am more likely to click a PPC ad if I am searching for a product or with the intention of making a purchase. If me search is research or information based I will stick t the natural search results.
    In my eyes the fact remains though that an effective search strategy should incorporate both paid and natural search to get the best out of both channels and provide a holistic view of overall search performance.



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