In a post that Andrew Goodman wrote today he notes that Paid Search is actually more profitable than Organic Search and here’s why:
“… it’s a no-brainer that revenue from organic searches will be lower than that from paid searches, in part because high-ranking pages may be “wrong” pages from the site owner’s business standpoint.”
I’m actually going to test that assertion in accounts where I have access to paid and organic ROI – but I can see that Paid tends to perform better as its more highly focused whereas, as Andrew noted, organic traffic from Search can be coming from a variety of pages, many of which aren’t the right ones.
For example – take a client’s site that runs paid and organic
Organic had 1 out of 54 visits converting – in this case subscribing to a newsletter
Paid Search has 1 out of every 13 visits converting.
Overall, based on the above numbers – a Paid Search Visitor was 4 times more likely to “convert” than one that came from Natural (Organic Search) – mostly due to the quality of the pages that Search Engines, particularly Google rank near the top of results.
Interesting and sobering thoughts – one that makes you wonder if the limit of how well this site is going to do has more to do with how much it’s willing to pay and how well it’s doing it’s paid optimization – and the rest of the factors are relatively minor.
And the case below is real…. I bet I could replicate it many, many times.
Unlike Andrew, I don’t really believe people should go out of the way to do a lot of Paid Search – But ….. if you want a lot of ROI but don’t want to spend much or any money ….. well … you get what you paid for – nuff said.
Perhaps the only calculation one could do beyond what I’ve presented here is calculate if by spending less and making less – you still come out ahead – I think if keywords being bid on were really expensive – than perhaps getting more traffic from Organic and spending less for Paid makes a lot of sense.
Let me make up an example – say I spend $2500 per month on Paid Search (and that drove me 54 Conversions each worth 100 bucks each) then each conversion would cost me about 46 dollars. Ok, not that bad, I spent 46 dollars and I made 100 dollars – I can live with that.
On the other hand, I see that if I spent nothing and just did Organic SEO (I’d still have to pay someone to do that for me unless I tried doing it myself – a lot of people do try – but they have very limited success) – did nothing but let Google drive traffic and I made I might do OK but I’d need four times the traffic to make what I could have made with a targeted campaign.
The ideal situation will be somewhere in the middle – but it’s tricky to cut back Paid too much thinking Organic will pick up the slack because your never sure how much leaving on the table.