Hot Debate: Organic vs. Paid Conversion Factor

[Mike Sack]

iProspect recently released a study suggesting that Organic search results (results that come from the normal search results) convert far better than traffic from paid placement (buying keywords at Overture/Google AdWords).

Does anyone have some insight into this? Do you believe this is accurate?

In my experience, you do get more conversions from Organic traffic, but paid traffic can be worth more money. Tell us about your experiences.

[respree]

I don't have any experience in this area to share, but would you mind posting a link to the iProspect study. I'd be interested in taking a peak.

[pleeker]

Mike - the only experience allowing me to compare is in the real estate industry. In this case the traffic coming from paid clicks is much better in terms of converting to clients for the site owner in question. I suspect that's due to the spam and other garbage that takes up a lot of the organic listings in this industry.

Perhaps it's a different story in other industries. I would think so.

[AussieWebmaster]

Originally Posted by Mike Sack

iProspect recently released a study suggesting that Organic search results (results that come from the normal search results) convert far better than traffic from paid placement (buying keywords at Overture/Google AdWords).

Does anyone have some insight into this? Do you believe this is accurate?

In my experience, you do get more conversions from Organic traffic, but paid traffic can be worth more money. Tell us about your experiences.

I keep an eye on those numbers and would agree absolutely that organic converters higher then PPC... as I have mentioned on this forums in a number of areas the thing I disagree with is that you get more results from free search.
PPC for me is working better and that is with both at number 1.

[Rob]

My experience is that it depends on the industry. My company also recently did some research which shows that organic generally does convert higher than paid (and in most cases also costs less, so the cost per conversion is less).

Again though it seems that it is industry specific. IE travel related industries can convert higher on paid, but other commercial ventures get better conversions on organic.

Some people prefer ads, but most prefer organic because they feel it's harder to influence organic therefore it's probably a better source for them. They feel that if a top spot can be bought then it might not be as good a source because that site "had to buy their position."

A lot has to do with perception and the users comfort with the web, as well as what they were looking at and what the coversion was. IE many people were comfortable with spending less than $50 online, but as the value increases the liklihood of conversion decreases, so does the conversion path (organic vs. paid).

There was also an issue with privacy. If the user didn't have to give personal information (even an email address) there is a greater liklihood of converting but once they cross that anonymity threshold then the liklihood of conversion drops.

So when it comes to determining what's better - I've found that there isn't one hard and fast rule. It all depends what your site is, what it does and who its customers are.

[Nacho]

Originally Posted by Mike Sack

iProspect recently released a study suggesting that Organic search results (results that come from the normal search results) convert far better than traffic from paid placement (buying keywords at Overture/Google AdWords).

Hello Mike,

I believe you are talking about this study:

http://www.iprospect.com/media/press2004_05_04.htm

Search Engine Marketing Firm iProspect Survey Confirms Users Find Natural Search Results Most Relevant in Google and Yahoo! While MSN Users Prefer Paid Search Advertising

Where the study mainly talks about usability within the search engines, but does not cover the more important topic of conversions, as you mention.

From the ecommerce companies that I cover, I can confirm (just about) the same traffic ratios as the iProspect study. However, when it comes to conversions, I see 60/40 sales (organic/ppc) from Google. Overture does bring in a lot more conversions from what I can track compared to the organic traffic from their primary search engine partners.

IMO, it all makes sense. Just look at how Google and Overture’s Partners list their sponsor listings. With this example of tests by Yahoo, you can see that they are finding ways to blend even more the sponsored results with the web matches, so that it is very difficult for the user to tell the difference, or better said, be lured to choose the sponsored matches.

[seomike]

I've seen organic results convert more on some but not all of our clients. One of our clients was totally convinced that his sales were coming from ppc. He wanted to terminate his SEO so we told him to turn off overture and adwords for a week and put it to the test. So he did. His sales on average were the same. And improved his bottom line without the ppc costs which were pretty expensive to maintain.

We do still use ppc with his campaign but just not as agressively as before. It was good for branding and I'm sure the over all impact of having top rankings for many terms due to the PPC has helped in bringing traffic in because they remembered the name.

I have also noticed that PPC leads usually convert days later. Has anyone else seen that trend?

[AussieWebmaster]

Originally Posted by seomike

I've seen organic results convert more on some but not all of our clients. One of our clients was totally convinced that his sales were coming from ppc. He wanted to terminate his SEO so we told him to turn off overture and adwords for a week and put it to the test. So he did. His sales on average were the same. And improved his bottom line without the ppc costs which were pretty expensive to maintain.

We do still use ppc with his campaign but just not as agressively as before. It was good for branding and I'm sure the over all impact of having top rankings for many terms due to the PPC has helped in bringing traffic in because they remembered the name.

I have also noticed that PPC leads usually convert days later. Has anyone else seen that trend?

Guess the guy was not using ROI tracking... he would not have had to speculate. The use of a tracking program is essential even if you are not using PPC. You can measure free results by terms, engines and many other variables.
These are essential for making informed decisions.

[surftrip]

at EncoreTickets.com, we have begun to concentrate more on organic (free listings) and less on PPC.

we use PPC to fill in the holes. meaning, using PPC to place us top for heavily searched keyword phrases that continue to be very difficult to achieve high rank association.

we focus heavy on organic to get those sales where people are very specific. when people get specific, we are almost always number 1 in organic and thus, need not pay for the inclusion.

here's an example:

"atlanta falcons tickets" is a heavily searched phrase and lots of ticket sellers are shooting for it. we were late to the ecommerce game and we constantly play catch-up regarding that and other "high profile" terms ...so we pay to be in the top 3.

but, for highly targeted searches like - "BET Awards tickets in LA" - we are number 1 (on google) and we make these types of sales all day long.

i look at at it as: PPC is for the short-term. never know what the landscape will be; however, organic is for the longterm and the better you can make your sites play nice with the engines - the more sales you will reap in the end.

[AussieWebmaster]

Originally Posted by surftrip

at EncoreTickets.com, we have begun to concentrate more on organic (free listings) and less on PPC.

we use PPC to fill in the holes. meaning, using PPC to place us top for heavily searched keyword phrases that continue to be very difficult to achieve high rank association.

we focus heavy on organic to get those sales where people are very specific. when people get specific, we are almost always number 1 in organic and thus, need not pay for the inclusion.

here's an example:

"atlanta falcons tickets" is a heavily searched phrase and lots of ticket sellers are shooting for it. we were late to the ecommerce game and we constantly play catch-up regarding that and other "high profile" terms ...so we pay to be in the top 3.

but, for highly targeted searches like - "BET Awards tickets in LA" - we are number 1 (on google) and we make these types of sales all day long.

i look at at it as: PPC is for the short-term. never know what the landscape will be; however, organic is for the longterm and the better you can make your sites play nice with the engines - the more sales you will reap in the end.

Have you tried listing in both for a couple of these terms? If you have tracking you can see if it comes from the PPC or the organic. Considering you may increase your overall clicks and the payment is only required when a PPC is used... so long as you close enough of the PPC visitors it is still more business and more profit hopefully.

[surftrip]

good point; however, as you know, click costs can run up quickly. we aren't selling a static item, we sell tickets and therefore "product management" can get tricky.

demand rises and falls based on many factors and would require a team to manage all the various events, sports teams and theatre shows ...not to mention all the editorial hype that could either drive a shows interest higher or lower.

that's why organic attention is so important. when you can get the engines to spider you at least once a day, that's a very positive move. especially if you have volatile pricing and/or availability. google spiders us daily and while they may not index every link everyday, they do well in keeping up with the inventory.

now, if i could only find a dynamic to static solution that would work in my architecture... (but that's another thread)

in a perfect world, it would be nice to have all the events in PPC and organic, but they expire and new ones are always coming along.

i will say though, that it's awesome experience. if i was doing all this for a 'hard product' retailer ...wow, i could work wonders.

;-)

[surftrip]

...also:

back to the subject. i think, in our world for example, organic converts much better. click fraud, shoppers and random clickers can drive up the cost withput much sales activity

but, in organic, the #1, 2 or 3 position carries more credibility with people. ...especially, the savvy searchers who don't want to give the advertisers the benefit.

as time goes on and people get more and more search engine experienced, they will come to view text ads as they do "banner ads" now. that's why i believe organic search is the long term solution. getting links to your site is huge. can't get good ranking without 'em ...and the more people linking to you buulds your brand, exposure and recognition in the long run.

i like the approaches that organic is taking these days and once they get aggressive on spammers, things will even get better for organic conversion ...but until then, gotta pay that PPC bill along with optimization.

phew....

[AussieWebmaster]

Inventory ties to PPC spends I have yet to see in any of the tracking programs I have played with or use.
I know you can have the site email you when the inventory reaches a certain level, but there would need to be a human intervention to turn off the account... unless you had an agreement with Google rep. to turn off set campaigns when they recieve a copy of such an email.