Last month on the SEOMoz blog, Rand talked about the disconnect between PPC and SEO spending, along with about 100 commentators, including QualityScores’s CEO, James Zolman.
In his post, Rand poses the question: Why does paid search earn so many more marketing dollars than search engine optimization when organic results get more traffic than PPC ads?
In this post, we’d like to respond to this issue as well as question the assumption upon which the question is made.
Part of the data for the conclusion that most traffic comes from organic listings comes from a study done by Eyetools Eyetracking Research, which shows that out of a study of 50 people, most of them viewed a Google search results page like this:
As you can see, most people looked at the top left corner, with a smaller % looking at the right side. The SEOMoz blog concludes that SEO drives much more traffic than PPC, and several users then debate the reasons why more money isn’t spent in SEO if this is the case.
The assumption behind this conclusion is twofold. It assumes 1) that the triangle in the heatmap moves down to the organic results when sponsored ads are present above the organic listings, and 2) that traffic from SEO converts well enough to achieve a greater return on investment for SEO spending than PPC spending for traffic does.
Eyetools states in this study that the triangle of the most views “appears to include top sponsored, top organic results, and Google’s alternative results.” This would indicate that when ads are shown at the top of the page they receive more exposure than the top organic listings.
So in the screenshot that we see here, there are only sponsored links on the right side, and organic results go all the way to the top on the left. We overlayed a screen shot of a search results page with 3 sponsored results at the top on the left, and drew a box on the heat map where these ads were. As you can see, the majority of users’ eyes would scan the sponsored ads in the top 3 positions most heavily in this case:
So in the case of ads being shown on the left, PPC will get more traffic. This taints the data and the assumption that the SEO is best argument relies on. A more conclusive test would separate search results pages with ads on the left from those without them, drawing heat maps accordingly. This would help us to make some more educated assumptions about the topic we’re discussing.
Additionally, it can be said that traffic from sponsored ads may convert more easily than organic traffic, since many users click on ads with the intention to buy, where organic clicks may be less transactional and more informational. This will definitely vary depending on a lot of factors, and it’s all subject to verification or debate by data from studies, but what I’m saying is that your ROI may not necessarily be greater for SEO spending based on how targeted your traffic may be. Many of you will say “not likely,” but I say “not impossible.”
So who wins? SEO or PPC?
The answer is not to choose one over the other. As James Zolman pointed out,
I [have seen clients'] net income double and triple because PPC and SEO work together. SEO is slower, therefore the expense is lower for these particular clients. They would put more money towards SEO (beyond the $20k-$40k they already spend per month on it) if the results had a wider, faster reach. When they see the return on investment from one set of targeted keywords, they move to the next with the ROI obtained from the previous while leaving some on the table to manage and continue to strengthen their organic rankings. The same goes for PPC – except it is much faster moving, has a much wider reach, and proves a ‘good enough’ ROI to reinvest in it even more. It’s quite scalable… just like SEO, only a little faster for the most part.
Let me tell you about the conversion lift that PPC brings to SEO and vice versa – One company was making roughly $100k/mo from SEO 1 year ago. That seemed to be steady as they ranked in the top 10 for well over 1000 high quality terms. Enter PPC – within 3 months, their new income was at $400k/mo at an expense of $200k/mo on PPC. PPC contributed to doubling their ‘net’ even though the second $100k/mo net was more expensive than that provided by SEO. Their entire net increase could not all be attributed to PPC. We had return visitors, and we noticed that several who clicked on paid search ads would come back via an organic route and vice versa. I would say the doubling of net came because of the natural lift that each (PPC AND SEO) had on the other. Of course, without that added reach and traffic from PPC the SEO may/may not have increased two-fold within 90 days because PPC let us target 10,000+ new keywords/combinations where the company did not have quite the exposure that SEO was currently bringing to the brand/site – coupled with ‘owning’ more real estate for the 1000 or so terms they rank well for.
At the very least, I would never turn off PPC when a client gets top rankings via SEO – the added lift can be incredible. You just have to learn what combination gives you that ROI lift/brand lift. When I say combination, I mean which ad text compliments the organic listing, what position is positive vs negative, when is there a real ROI, etc. It’s all in the analytics.
Bottom line for me: SEO is not better than PPC. PPC is not better than SEO. PPC is not easy ‘out of the box’ beyond the surface. SEO is definitely technical. They NEED to work together because they MAKE YOUR CLIENTS MORE MONEY, MAKE YOUR COMPANY MORE MONEY.
And I’d add to that that the more real estate your website listing takes up on the page the better. Whichever investment is more profitable, both investments together are the most profitable. Until you get to the point that your marginal cost is higher than your marginal return, a joint SEO and PPC spending strategy is a great idea. As long as you can make money back from each investment, why not pile them up together?
And of course, PPC is a great way to sustain profits while you wait for your SEO to take effect anyway.Read More
Yahoo! Search Submit Pro recently added (99% sure this is recent because I haven’t seen this before) a ‘site link’ functionality that looks very similar to business.com’s paid links and, of course, there was probably some influence from Google’s first result site links – I wouldn’t be surprised if Yahoo! got the bright idea to add more links to more sponsored ‘organic’ results from Business.com because business.com’s paid directory listings have been fed into Yahoo!’s organic results for quite some time now.
Click this screen shot to see the details:
Special note: Every single link above the fold for the query ‘loans’ in Yahoo! is paid! Wow!
Check out what a normal business.com listing looks like:
Eerily similar, right? Business.com’s directory feed has been picked up by Yahoo! and stuffed into the organic results for quite some time now…or business.com has been using ‘search submit pro’ for their directory feeds…I can’t confirm anything, just speculating here but I can say for certain that business.com directory listings appear in Yahoo! organic search results…so I wonder if Yahoo! picks up these extra links now as part of the package or does business.com submit them via ‘search submit pro’ as part of their package?
Yahoo!’s Search Submit Pro is a program where you can get ‘organic’ results that are really ‘paid’ if you can spend $5K+ per month. The application process is quite rigorous because the quality level of the pages you want in the ‘organic’ area have to be extremely high – or so they say. These ‘sponsored’ results are easy to spot as a paid search marketer or SEO but the general user probably does not or would not know the difference. You can spot these results by simply rubbing your mouse over the link and looking at what the status bar says at the bottom of your browser.
You might be surprised at how much those ‘organic’ listings could cost – they are profitable for business.com because they cost less than business.com does. I can say that I know from current experience that the top organic result for some insanely competitive keywords only costs .75 to $2 per click while the sponsored ‘non-search submit pro’ side of advertising would cost $5+/click for the number 1 spot.Read More
Aaron Wall, the guru behind SEO Book.com’s SEO Training Course and SEO Tools, posted a blog post a few weeks ago about guest posting for a number of his readers. We were one of the lucky ones that he responded to with an in depth PPC interview. He was very complimentary and we’re excited to share his answers to our questions. Enjoy!
On what percentage of your websites do you use PPC? How do you decide whether or not to use PPC on those websites?
At one point or another I like to think I use it on all of them. Most my sites are ad driven or affiliate driven though, so I don’t compete on the core most competitive commercial keywords via PPCÂ for all of them, but I try using PPC for link building in some cases, and use it in others just to get mindshare in the marketplace…you don’t know what single piece of marketing will stick, but if you are doing 10 things in parallel I think they start to feed off each other. Lots of push marketing (and/or viral marketing/public relations) is crucial for a new website or brand.
Do you believe PPC can be both a short term and long term strategy? More one than the other? Why or Why not?
I think for it to be longterm you need to have an efficient sales cycle and a decent brand. If you do not have a well known brand then the branded competitor will likely have fatter profit margins, and can basically take market share from you at will. And if you are working without a brand, quality scoresÂ are helping the competitor and crushing you…tomorrow if not today.
Do you use any secondary ppc platforms like adbrite, miva, business.com, others? Any favorites? Why/why not?
I tried many of them a few years back, but typically have seen ~ 0 volume or lots of volume (driven entirely by click fraud). Based on that experience I never really went back to the 2nd tier engines much…I figured there was more value in refining Google / Yahoo! / Microsoft campaigns, and in brand building or business model improvements rather than hunting out cheaper clicks. Having said that, on some rare occasions I have seen a Searchfeed ad listing or AdBrite ad unit on a page that ranks well in Google’s organic search results and found that to be a cheap way to arbitrage Google traffic, but that is a rare lucky good deal.
Some of the 2nd tier engines have seen that I own BlackHatSEO.com and have made me custom ad offers to spam Google in exchange for a nice cut of their revenues (going so far as sending me spreadsheets of their top paying keywords), but since many of their ad buyers were affiliates it did not make sense to go from Google to me to _____ to affiliate to merchant…it would be just as easy for me to sign up for the affiliate program directly. If I was using click fraud then it might make sense to sell them clicks, but how hard is it for me to clone what the affiliate was doing and cut those two out of the transaction?
A friend of mine who was in the forex space swears by some of the second tier engines, but in most markets I think time is best spent optimizing your campaigns on the big 3.
Can you summarize where you think PPC advertising tactics, strategies and ROI are going to be 5 to 10 years from now?
I think many companies are already willingly lose money to buy market share. And I think that trend will only grow as time passes. The days of direct response short term 300% ROI search ads will be over (other than for a short period of time for stuff like the newÂ ring tone reverse billing fraud of the day).
As marketing gets more sophisticated PPC will get too competitive for many small companies to compete. I see search becoming a brand buy more and more as time passes, rather than having such a focus as a direct response medium. Plus some people will be willing to pay to give away what looks like free information, but is essentially a sales message wrapped in fancy value add formatting that does not feel like an ad…much moreÂ content of theÂ Teaching Sells variety.
What is one secret to PPC success that you haven’t ever shared before?
My affiliate code for signing up with Google is… oh that is the wrong answer. I don’t test PPC stuff anywhere near as well as guys like you do. I don’t really have any PPC secrets beyond using PPC as a link building technique…I think that is overlooked far too often.
Finally, what kind of a time and capital commitment do you recommend a brand new website invest in PPC compared to SEO? What about a 2 year old website? 5+ years?
I think off the start you have to do a base level of link building to get the site going…so that takes about a day and maybe $1,000. From there it is critical that you really find out what keywords convert well such that you can create content around them to optimize your site for them.
One site at the 5 year point might be more screwed up than the next site is at a 5 day point. But no matter where your site is you should keep using PPC to buy mind share and market share, and to test how well your site converts and refine your sales cycle.
If PPC ads seem like they are too expensive then there are likely some issues with your sales cycle or value proposition.
Any additional thoughts about pay per click advertising?
I think you guys know a lot more than I do about PPC. Not sure what I can say to you as a tip!Â :)
Thanks for sharing Aaron!Read More
1. How-To Customize Your Google Analytics Dashboard
First, log into Google Analytics and view your dashboard. You can close several of those default metrics if you do not want to use them as your KPIs.
Second, find the report you want to display on your Dashboard. For our site, qualityscores.com, we added these reports: Reverse Goal Path, All Traffic Sources, Goals Overview for each goal, etc.
Finally, when you are at the report that you want to see in your dashboard, simply click on the “add to dashboard” button underneath the report title. Now you can see the report in your dashboard!
2. Google Analytics KPI Gadget for iGoogle
Analytics KPI for iGoogle – Without having to log into your Google Analytics account, the widget provides a snapshot of your key performance indicators using the red and green indicators you are used to from Google Analytics.
3. SAP Business KPI Community
KPI Wiki – In today’s business world benchmarking has become increasingly important. That means that virtually every company wants to compare its performance to the market leaders. As a result you need a common KPI language.
4. KPI Library
KPI Library – The free KPI Library is a community that provides an extensive library of Key Performance Indicators (KPIs).
5. Visual Revenue
The difference between a KPI and a Metric – How does one decide if a Metric qualifies as a Key Performance Indicator? and if so, what are the characteristics of an excellent online marketing KPI?
Online Video Analytics – KPIs – These online video metrics affect your KPIs but are not KPIs by themselves.
6. VKI Studios
Key Performance Indicators (KPI) for e-commerce websites – Quick list of the most effective and actionable KPIs for an e-commerce website.
Key performance indicators – Key Performance Indicators (KPI) are financial and non-financial metrics used to help an organization define and measure progress toward organizational goals…
Using key performance indicators (KPI) for effective project management – Key Performance Indicators are quantifiable measurements that reflect the critical success factors of an organization. Based on beforehand agreed measures, they reveal a high-level snapshot of the organization.
Developing key performance indicators in projects – Key performance indicators should preferably meet the following essential criteria: Be direct (no complex calculations), Be objective, Be adequate, Be quantitative, Be practical, Be reliable.
Bonus PDF from the Web Analytics Association (WAA)
Web Analytics Key Metrics and KPIs (PDF) – In the interests of discussion clarity and Web site reporting standardization, this document defines key metrics and Key Performance Indicators (KPIs) for Web Analytics.Read More
I admire affiliate SEOs/PPC Marketers.
They can take any affiliate program and make a ton of money – at least that is my perception of the great SEOs/PPC Marketers.
After studying SEO and PPC for a while, reading everything I could read on the subjects and successfully applying everything I know to several sites during the past year, I can say with confidence that the SEO/PPC Marketer who takes an affiliate program or home based business and makes $100,000+ per year with it is an individual that has gone from good to great in SEO/PPC Marketing.Read More