Does PPC + Organic listings = Cannibalisation?

[Deano1976]

I joined a UK online retailer 3 months ago and proceeded to optimisation and expand on their Google Adwords account. I thought I was doing well as my Adwords reports showed that revenue and ROI were increasing.

Recently, the directors have asked me to cut back on the PPCs because they believe that running too many PPCs on keywords, which we have a first page organic position is merely taking visits we would have got for free.

I have used Google Analytics and have found that this is not true in all cases, however, I am not too sure if my directors are going to agree with my findings because they are only looking at top line sales.

The Google Analytics results showed that PPC traffic and revenue dropped by 50%, Organic traffic only marginally increased 3% (when in the past it increased by 6% naturally), whereas Direct traffic fell by 15%. I believe cannibalisation can only really happen if you have top PPC, top organic and there are no other PPC competitors because search is so massive there is always enough to go round. I believe the key is ROI.

I was wondering what people thought of this PPC vs SEO and cannibalisation argument and whether anyone has any recommendations on a suitable strategy for running PPCs and SEO campaigns in total harmony?

[chris1]

No, according to this...

http://www.searchengineguide.com/hartzer/005987.html

[Shmuel]

Nobody has a sure fire answer. The theory that we go by is that a potential customer sees you in the natural listing and sees that you are relevant enough to be there. Then they see you in the paid ads and see that you can afford to be there. Our theory is that because of this, they are more likely to purchase through you. Now there are a lot of factors involved; We try to place our ads near our natural listing (which is usually in the top 5), so our ads are above the fold.

One thing you may want to point out is that while it may be costing a little more, at least the customer is buying from you.

A big fight I've had with my marketing director is the running of branded ads, based on searches for our company name. They perform VERY well. What we don't know is if we turn them off, if the customers will go through a competitor's ad, even though the SERP is full of our natural listings. I'm wining the fight at the moment and my ads are on.

[adamap]

Give the user as many chances to get to your site as possible imo.

[gabs]

Originally Posted by adamap

Give the user as many chances to get to your site as possible imo.

Yep lets say u get 2 links in the top10 and a ppc that 3 out of 20... Odds on...

Most people don't know the top links are sponsored.. Simple as that..

Even web savy people who make a living from online sites don't notice the top links sometimes..

[J Clark]

I work for an agency managing PPC campaigns for a number of clients - I consistently come across this argument between account executives, clients and our dept primarily for the reasons listed in the initial post.

My thoughts are:

1. I want the conversion no matter how we get it (as long as it is profitable)
2. If my company isn't visible in those sponsored spots, our competitors will gladly take the real estate.

To assure we grab every click (paid or organic) and every possible conversion I always recommend taking up as much of the visible real estate on the first page as possible - if you have a top 10 listing I would still buy the paid term as well.

[shorebreak]

Here's something I wrote on the topic many months ago, but I think it still holds true.

Conclusion? SEM doesn't cannibalize SEO in the real world.

[0atnet]

Originally Posted by chris1

No, according to this...

http://www.searchengineguide.com/hartzer/005987.html

It's really useful, thanks!

[abbottsys]

Originally Posted by Deano1976

.... Recently, the directors have asked me to cut back on the PPCs because they believe that running too many PPCs on keywords, which we have a first page organic position is merely taking visits we would have got for free....

I've encountered this arguament from management many, many times. It's usually made by folks who do not understand the nature of marketing.

I have 2 approachs that help..

Approach#1
-Your organic listing is not what you want to say about your company, it's what Google's index says. So it's not Marketing, it's PR.

-Your paid listing says exactly what you decide to say. So it's Markting.

-A company needs both PR and Marketing.

Approach#2
When management says that running paid ads just charges them for traffic they would have received for free you can mention this..

Really? How do you know you would have gotten it for free? What about all those folks that see your nice #1 organic listing and decide NOT to click it?

[NewKidOnTheBlock]

I've theorized about this before myself (and asked anyone from SEOs to PPCs to web analysts), but then again why not just test it?

Why not do it without PPC for a (statistically significant) time period, look how much profit you made.

Then add PPC into the mix (for a statistically significant time period) and look how much profit you've made, now.

Of course, you'd have to make sure you have an eye on seasonality and on how your organic spots in the SERPs change - but then again, if you're getting a ton of searches in the niche, you might be able to do this quickly enough so that you wont have your organic rankings jump up and down.

I guess it gets a bit more complicated, because you have to optimize for PPC, too, but would it really be too complicated (costly) to just test doing it without PPC and with PPC and looking at which way makes you more money?

Actually, couldn't you just turn on the PPC campaign and then look if it really does 'cannibalize' traffic or if your organic traffic levels are about the same (or higher)?

[undercoverseo]

I came across this situation recently as well. We had position 1, 2 & 3 organically for a branded term that we were also targeting in PPC.

We decided to forego purchasing the PPC keyword since we had such a strong showing organically b/c:

- It was a branded term that wasn't super competitive.
- We could reinvest the PPC savings into much more competitive terms.

If the keywords were more generic and competitive I would have recommended keeping the PPC ads going at the same time to "own the shelf space" in the search results and minimize the amount of exits.