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.