Search Engine Advertising Choices

Chris · #1 (**permalink**) 09-29-2005, 09:54 AM

The following was written by Jim Hedger

Search advertisers are offered two basic marketing models, paid-ads and free organic ads.

While there are advantages and disadvantages to both models, one clearly stands out as a better advertising option than the other. Why is it then that advertisers from small business to mega-corporation tend to show higher interest in the more expensive and least effective of the two?

Most SEOs speculate that advertisers understand paid-advertising better than organic placement. As much of search marketing is conducted in-house and optimization is a learned-skill, corporate marketing departments lean towards the very simple model of paid-search. Organic search engine placement continues to be perceived as a nebulous service that can take time to show results. On the other hand, paid-ad placements tend to show up minutes after they are established and bidding one's way to top spot is relatively easy.

With search ad-spends sometimes topping five or six figures per month, many SEOs shake their heads at businesses that refuse to invest a much smaller (generally low to mid four figure) sum on organic optimization. Ranging from small to mega sized operations, the number of paid-ad advertisers that ignore organic optimization seems to be growing.

Over the past three years, independent research has consistently confirmed that search engine users tend to click on the center column organic (free) ads far more often than on paid ads. Earlier this year, search marketers benefited from a number of published studies that clearly demonstrate the higher value of organic placements. While the results of this research is easily available to all, traditional and tech media stories tend to focus on paid-search advertising.

Two studies that made an enormous impact on the search marketing field this year are the Eye Tracking research conducted by Enquiro CEO Gord Hotchkiss and a whitepaper published by Lisa Wehr, CEO of OneUpWeb titled, " Target Google's Top Ten to Sell Online." Gord's study shows the basic F (or triangular) shape search user's eyes tend to follow when examining search results. Lisa's study found that search users are up to 6X more likely to click on the first few organic results as they are to choose any of the paid results.

A third study, " Accurately Interpreting Clickthrough Data as Implicit Feedback " , released earlier this week by Cornell professor Thorsten Joachims looked at the links users found on search engine results pages and questioned why they choose which link. The results show again the importance of high organic search engine rankings. The researchers asked subjects to perform searches and looked at which results they viewed, which they clicked on, and what happens if those links are mixed up.

The Cornell study found that search users tended to view (look at) the first five organic results with a high percentage of them (approx. 2/3) viewing the top two listings with 42% of them selecting or clicking on that link. The number of search-viewers halves to approximately 1/3 of users viewing sites appearing in positions 3, 4 and 5. The numbers drop to about 1 in 10 users tending to view the 9 th and 10 th placed sites.

When a search user views search listings, it doesn't necessarily mean they click on those listings. In this context, to view means to examine. Users tend to examine the text used to phrase the reference link as well as the descriptive paragraph appearing beneath the link before deciding to click on it. This is especially true for the smaller number of searchers who view listings found in the 3 rd to 10 th positions as users who examined those listings tended to spend more time on the results page before choosing the link to click first. In other words, 1/3 to 1/10 of users are conducting preliminary research by seriously reading the text used to phrase the results before clicking.

This finding was backed up in another part of the Cornell study that showed when the same Top2 results were reversed, the text used in the link and description had a notable influence on which link the user clicks. The research found that when results were switched around, 34% of the users would still click on the site ranked in first place, even when they had seen the now #2 site there earlier.

In his Alertbox review of the Cornell study, Jakob Nielsen succinctly notes, " If users always clicked the best link, then swapping the order of the two links should also swap the percentages, and this didn't happen. The top hit still got the most clicks."

These findings led the research team to suggest there are two biases playing out in the minds of search engine users. The first is the Trust Bias, which leads the searcher to believe that a site ranked in the number 1 position is there because it must be the best reference for that keyword. The second is the Quality Bias, which considers the text used in the results to determine which is the best site to choose from.

For search engine marketers and more importantly, search engine advertisers, there are two glaringly obvious implications.

First of all, it is extremely important to be found at the Top of the search engine results. Being in the Top10 is likely sufficient for many businesses but the sites getting the most business are found at the top. To further these findings, Gord and Lisa's research clearly shows that searchers are choosing organic placements over paid-ads.

Secondly, the copy used in your Title tag and site content has to be more compelling than that of your competitors. Search users are reading before clicking. If they have to make a choice between three sites that are all perceived to be equal (those in the 3 rd to 5 th positions), they will almost always choose the one with the most topically relevant descriptive text and link-copy.

Put together, the results of the three studies show that search engine users are able to tell the difference between paid and free listings and tend to trust the free organic listings more than they do the paid ones. The studies also show that search users, while still tending to put a higher bias on the Top5 results are becoming sophisticated enough to seriously consider descriptive copy before choosing to select a link. In other words, the search users are starting to make what appears to them to be the wisest choices when selecting search advertising. The advertisers are advised to do the same.

kgun · #2 (**permalink**) 09-29-2005, 03:48 PM

"Search advertisers are offered two basic marketing models, paid-ads and free organic ads."

They call it free organic ads, but how free is it if you consider the amount of time used to get into the top ten position?

The paid may even be much cheaper.

How many found gold in the Klondike Gold Rush?
http://www.nps.gov/klgo/

The internet medium (industry) is young. But less then 10 % of the sites on the internet make money, money to pay their employers or feed their owner. As it matures, it will in my view (but I may be wrong), be more and more difficult for a new startup company to succeed. And advertising may be more expensive. Tv Ad is very expensive, and not for small companies in Norway. I do not know how it is in other countries.

Conclusion:
1. To succeed with "free" organic Ad on the internet in the future, you have to invest more and more of your time in learning the different SEO techniques.
2. More and more of Ad words will be bought by companies with a large (huge) Ad budget.
3. As allways, the small fishes will feed the big sharks.

seofan · #3 (**permalink**) 09-29-2005, 07:38 PM

Most businesses are wanting to get off of PPC. They were losing or breaking even - which is still not growing the company profits.

Case studies we have show that sales and traffic reflect the profitable reach that "organic" placements have in search marketing. Quite a few businesses have placements in the top 1-5 that number in the 400 to 500 placement range opposed to the 4 or 5 key phrases in one or two search engines they were able to afford under PPC. Visitors respond more, find them easier, and buy more. The statistics show it.

In all cases, client's PPC costs are eliminated. On the average, a full hands-on SEO only cost about 1/3 of the previous PPC arrangements. Statistically, the traffic averages a 40-50% increase and properly analyzed, and targeted key phrases based on products or services yield increases of sales proportionate to increase in traffic (industry types do affect demand for specialty items and has to be taken into consideration. All case studies reflect statistics that range from at least 1 year to over 6 years in organic SEO campaigns. Properly managed, the increase and expansion carefully improves. Of course, plateaus can be reached, but then creative expansion begins to further develop SEO results as time goes along.

After 9 1/2 years in this line of work (and yes, I'm an InfoSEEKer that started long before we established SEO as an "industry"), I have yet to see a solid example of PPC that has been a true success except in the most outrageous of situations such as the adult industry or specific travel industries.

I have seen the head shaking and nay-saying from CEO's concerning paying for TRUE organic SEO campaign management. I have also seen them sign for the PPC campaigns at 10 times the monthly sum or more. My observation is that PPC is following the same format as traditional advertising. You pay for an ad and it gets published. There is a "perceived" tangible. With organic SEO specialist campaigns, unless the specialist has years of case studies, stats, current clients that have had organic SEO for years and other things that truly PROVE results in organic placements, the organic campaign seems more of a gamble.

Good organic SEO specialists take the time to try to educate each potential client. This is a lenghty and time consuming process in itself.

Should a potential client business still choose to go the PPC route to see "instant results", etc, it usually takes a year of outrageous PPC campaign fees that barely break even with sales before the lesson concerning organic SEO positioning is driven home.

Duncan Pollock · #4 (**permalink**) 09-29-2005, 11:26 PM

I don't think there's any doubt that a TopTen SERP position will produce results that surpass those that PPC ads can provide. I'm also satisfied that the net cost of SEO is less than the money spent on PPCs.
However, there's the problem -- and almost all of us accept that it exists -- that no-one really knows what the algos are nor if/when they're going to change. Posts here at WPW are constantly bewailing the sudden loss of position and repeatedly being met with a response "Who Knows Why?"
True, there can be a bad hat basis, but we expect this to catch up with the site and, for the present case, such "exceptions to the rules" might as well be ignored.
In theory, however, a site earns/achieves/deserves its TopTen position because of intelligent and sufficient application of SEO principles. But if these keep changing -- as they do -- all thoughts of ongoing good organic placement and results disappear as quickly as the site in question. In acknowledgement of this, we're therefore advised to exercise constant monitoring and to have, as it were, Plan B ready at all times.
In contrast, PPC deals with knowns instead of unknowns. Sure, you need the right wording and the right choice of keywords but, if these are what they should be, a R.O.I. is just about a given. In effect, you pays your money and you'll get yourselves a fairly decent return -- and certainly one that's far more predictable, measurable, and analyzable than is the case with print and other media.
In contrast -- and if we're brutally honest about it -- SEO continually incorporates surprises and this is what most business people are determined to steer well clear of.
The economic case for SEO can be made, but it can also be seen to rest on shifting sands. Even if PPC is more expensive, it at least has a more solid foundation.

Duncan

lacantina · #5 (**permalink**) 09-30-2005, 05:49 AM

Fully agree with Duncan. SEO is too much of a risky and volatile investment, PPC is a guarantee.

Second, don't forget that top paid listings do indeed appear at the top of the results page on both Google and Overture, ABOVE the organic listings. And having seen stats for this week on week, they do get the clicks.

GaryBradshaw · #6 (**permalink**) 10-02-2005, 10:49 AM

In addition the risk with SEO is paying $2000-$4000 and then waiting, waiting, waiting only to find out the SEO firm was a "rip off". Now a site owner has 3-4 months of corporate overhead lost along with the SEO invesment.

So I do a short term and a long term plan.

Must be great to be an SEO firm in that they are not able to promise anything for your money. And they really can't promise anything. I want a business like that!

qbania · #7 (**permalink**) 10-13-2005, 11:24 AM

Thanks to the conservative US GOVT and paranoid search engine companies an allegedly illegal US national pastime is being IMO slammed, and therefore unfortunatly PPC is not a guarantee in my industry. Overture and google don't even accept $ from casino/sportsbook websites...or their affiliates. Well some get up there but who knows why?? It's not like it used to be thats for sure...

I couldn't even get into google ad-sense for my sports themed blog because I had gambling related banners up on the site. (rubbish IMO). Just my .02c.

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