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According to a study conducted by search marketing firm Engine Ready, visitors coming to an online retailer's website from a paid search ad are 50% more likely to make a purchase than visitors coming from an organic search result.

The study, which tracked 20.8 million visits to 26 online retail sites over a 12 month period, found that the overall conversion rate from paid search was 2.03% compared to 1.26% from organic search. The study also found that paid search visitors purchased, on average, more than their organic counterparts.

If Engine Ready's findings are to be believed, one might be inclined to conclude that investments in paid search advertising might provide more bang for the buck than investments in SEO. But would that really be the case?

Warren Cowan, the CEO of search agency Greenlight, doesn't think so. He believes that Engine Ready's study neglects the entire purchase cycle:

What this research tells you is that paid search has a higher conversion rate than natural search. However, these results are gained by attributing sole value to the last click, ignoring the value of the other channels that lead to it.

Stating that Engine Ready's study paints "an interesting but largely naive picture", he cites his company's own research showing that "sales attributed to SEO on a last click basis increases by as much as 30-50% when the first click is taken into account".

So who is right? Engine Ready's data is quite interesting and worthy of consideration but I think Cowan makes a valuable point: a lot can take place between the first click and the last click. Simply looking at the last click paints an incomplete picture of how users discover and interact with websites during the full purchase cycle.

Personally, I think there can be little doubt that PPC and SEO are both usually important components of a comprehensive online marketing strategy. Obviously, resource allocation is important and companies do need to make decisions about how their search marketing budget gets spent.

But the most important factor in making those decisions is collecting the right data. Some companies will get more from PPC than they will from SEO. And vice versa. But you can only determine that when you take a 30,000 foot snapshot and know what's taking place from the first time the visitor clicks on the link to the time the visitor clicks that 'checkout' button.

Patricio Robles

Published 17 August, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Andy Xhignesse

Hi Patricio,

Man I think your posts are great, and once again you manage to engage in a topic where there is controversy and...well at least a little confusion.  While this debate will continue I think one thing is certain in this context, create sound relevant content with SEO in mind and you'll develop the kind of relationship desired that will lead to a conversion, whether organic or paid.  the other key element is ensuring that your landing page is appropriate and often companies fail to make effective use of their website to both acknowledge who the marketing persona is and also provide a strong CTA linked page.  Many companies have literally "bought-in" to PPC strategies and neglected their own websites ability to provide useful conversions...ouch!

We're at the edge of the future!

Andy Xhignesse

over 6 years ago

Patricio Robles

Patricio Robles, Tech Reporter at Econsultancy

Andy,

Thanks!

You make a very valid point: no matter where your traffic comes from, if you're not focusing on content and usability, you're probably not seeing the best conversions. I agree that one of the ancillary benefits of implementing an SEO strategy is that it will inevitably help you focus on information architecture, content and usability. All important things outside of SEO.

over 6 years ago

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Greg

Well, certainly not in my case. Organic traffic converts at roughly 12% with paid search sitting around the 8% mark. The average order value is a lot higher from organic traffic too.

over 6 years ago

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robwatts

I'm glad that people are looking at the whole issue of conversion attribution. It's not a straightforward beast, most know that it's a complex combination of factors relative to the keyword, website, product , position, placement (double facing organic + ppc ), vertical...and a whole lot more.

IMO, SEO still offers the most value long term simply because it's a sound investment that actually improves a sites ability to rank for a multitude of keywords, which of course equates to lots of relatively low cost traffic over time.Combined with a strategy that builds equity and value and boom, you are at the races...

I maybe stating the obvious when I say that intelligent analysis of the impacts of PPC and SEO used in tandem or individually, should also help inform future investment in both. Through looking at what actually converts, campaigns and strategy, both ppc and seo can be best tailored to fit the requirement.

It really can be hard to know which way to turn at times, thankfully the tools that are out there to help discern such events are growing weekly. Marketers in London may also be interested to learn that Latitude Group are running an event on the 15th September, where people can turn up and discuss the whole shebang too.

over 6 years ago

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matt lambert

I may be wrong, but I think the figures are entirely irrelevant unless they relate to exactly the same landing page.

I guess that at best what this would show is how well that particular site is managing to target it's SEO traffic, comparitive to how easy it is to target PPC traffic.

Whole site stats contain far too many variables to draw any other conclusion.

Matt

over 6 years ago

Joe Friedlein

Joe Friedlein, Director at Browser Media

As noted above, this could well be misleading data based on the last click model debate but I think that it also introduces question marks over trying to establish benchmarks for various online marketing techniques (including search).

I can't tell you how many times we come across misguided expectations of what to expect from search campaigns (either organic or PPC).

Where this is based on previous experience with either the same site or a site within the same industry / sector, then that is very reasonable and very helpful as a benchmark to measure new campaigns against.

When you are comparing conversion rates for a site selling Ipods to a site selling a subscription service (for example - please fee to replace with two different products of your choice), then you have to expect to see performance metrics that can be wildly different.

To state that you should always expect to earn £8 for every £1 invested in PPC (again, just an example) is too simplistic. Yes, within any particular sector, it is useful to have historic data to compare against, but you should expect to see different conversion rates for different sites.

This is equally true of the SEO v PPC debate. It is dangerous to view such claims as "visitors coming to an online retailer's website from a paid search ad are 50% more likely to make a purchase than visitors coming from an organic search result." as the gospel truth for all retail sites. It will depend on the nature of the products on offer and indeed the search terms used.

We applaud the survey and find it interesting reading but believe that any such research should not lead to blanket rules about the success rates of different marketing channels.

Joe Friedlein

www.browsermedia.co.uk

over 6 years ago

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Erin

We see this on our site regarding PVs. For the same keyword, users who come in from adwords more often have greater page depth than those coming in organically. Interesting!

over 6 years ago

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JohnHS

Another point in this debate that is significant and I believe, not stated in the Engine Ready research or the Greenlight retort:

The life-time value of SEO vs PPC.

PPC is great while you are paying the bills, and if you let me assert that good build/usability/information/interactivity/content/graphic/seo design (i.e. good web design) is actually the key, then the life-time benefit of good design has to be the decider in the comparison.

over 6 years ago

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