Lee Odden

Organic Versus Paid Search Results

image courtesy of robot-frog.com
A new WebSideStory study announced today shows that paid search has only a slight advantage over organic search results for conversions.

The study looked at more than 57 million search engine visits on Google, Yahoo and MSN and showed a median order conversion rate of 3.40 percent at business-to-consumer e-commerce sites for pay per click compared to a conversion rate of 3.13 percent for organic search results during the same timeframe.

This announcement is timely, because recently, someone on our MIMA-SM discussion list asked about clickthrough rates on organic versus pay per click ads in search results. It’s pretty common knowledge that most people click on the organic results, but this person was looking for a credible resource citing specific numbers.

So here’s what I found:

  • iProspect did a study (pdf) on this in 2004 (scroll to page 16 and 17) “Across the 4 search engines – Google, Yahoo! MSN and AOL — 60.5% clicked on a natural (or “organic” or “algorithmic”) search result, while 39.5% clicked on a paid search advertisement.”
  • A recent study by iProspect and Jupiter Research shows that 2/3 of users click on the first page of results.
  • The Enquiro eyetracking study is always useful.
  • A study by OneUpWeb (pdf): “…search users are up to 6X more likely to click on the first few organic results as they are to choose any of the paid (PPC) results.”
  • Jupiter: ” Algorithmic listings in search indexes generate an estimated six of seven commercially natured search referrals”
  • 2007 Marketing Sherpa Search Marketing Benchmark Survey
  • Chris Dohman pointed out this post from SEO Book citing data from Jupiter (5 out of 6 commercial purchases which originate from search originate from the free (or organic) side) and from Atlas on PPC stats.

In most cases, especially with consumer products, I think a combined (organic and PPC) approach has show to be exceptionally productive. I don’t think any online campaign, regardless of vertical industry or whether it is btoc or btob, can rely on a single channel of promotion like organic search results.

For a truly competitive advantage, companies are paying more attention to how they can integrate online and offline marketing efforts, get better performance out of multi channel and social media marketing.

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Lee Odden About Lee Odden

@LeeOdden is the CEO of TopRank Marketing and editor of Online Marketing Blog. Cited for his expertise by The Economist, Forbes and the Wall Street Journal, he's the author of the book Optimize and presents internationally on integrated content, search, social media and influencer marketing. When not at conferences, consulting, or working with his talented team, he's likely on a beach somewhere doing absolutely nothing.

Comments

  1. I agree.
    Damn right on the money.
    There is something called an intersection. You do it guy. You do it.
    Cheers,
    Bill Fabiolo
    Venice (Italics)

  2. This is very misleading. Industry averages are only that: averages. It’s like saying the average height of men in the USA is 5’9″ and then declaring this proves basketball players are 5’9″. The overall average conversion rate may be 3.4%, but that includes the vast majority of websites that are poorly optimized for online business. Sites with good strategy, marketing, etc. can get much higher conversion rates. I’m a co-founder and director of a 45-staff agency; many of our clients get 10%-20% conversion rates in PPC. For many of them, due to their specific markets, SEO and natural search is not relevant. PPC works very well.

  3. The announcement from WebSideStory makes no distinction that the websites included in the data were optimized or not.

    There are nearly as many PPC campaigns that are poorly setup as there are web sites that are poorly optimized for organic results.

    It would be interesting to see a study that specifically compares sites that are well optimzed for both in similar industry verticals. However, “well optimized” is a very subjective term.

  4. There are nearly as many PPC campaigns that are poorly setup as there are web sites that are poorly optimized for organic results….

    Agreed. Many companies are now handing over their campaign management to firms, and blindly. I’d make a bold wager that the huge percentage of marketing budget marketers alloate to PPC agencies would decrease if the terms they bid on converted. PPC participant should be nervous about handing over their budget control and management. Here’s a tool: PPC Customer’s Bill of Rights

  5. Balazs Balint says:

    There can be many reason that causes the difference of conversion rates. One problem can be targeting. The ones who biuld their campaign on organic traffic do not care too much about targeting. Visitors and page views are the magic words.
    A million user per day worth nothing if they are not from the targeted audiance. I think it is more natural to think about exact targeting if one pays for the ads. What do You think?

    Otherwise observation is not the right method of data collection to decide which is the better. Experiment is a much better and not expansive solution for this problem.

  6. Your blog is timely reinforcement about the purpose of blogs and what I aspire to as well. Really good one!
    regards
    charcoal grill

Trackbacks

  1. Click Fraud Concerns Crossover to Mainstream Media - SEO Blog - Metamend says:

    […] Though there is a great deal of controversy over click fraud, data provided by WebSideStory shows a 3.4% conversion rate for sites visited from PPC ads v/s a 3.13% conversion rate for sites visited from an organic placement. Lee Odden at the TopRankBlog wrote a good review of the report today. Clearly, paid search advertising works but with an estimate billion or more dollars per year in fraudulent charges, advertisers are starting to demand much stronger accountability on the part of the paid search providers. […]

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  3. Book Review of the Week - Search Engine Optimization: An Hour a Day » thinks says:

    […] While paid search gets most of the ink, if for no other reason than it helps drive the bulk of Google’s (and others’) revenue, and while results vary by brand and by term, natural search often drives greater click through among consumers. Grappone and Couzin do a great job of describing approaches for each of these steps above to ensure your business succeeds. Do yourself a favor and pick up a copy for yourself. […]