Paid Search Marginably Effective
WebSideStory recently published research showing that organic search conversion rates are nearly as high as pay per click conversion rates:
The research found that paid search had a median order conversion rate of 3.4 per cent at sample business-to-consumer e-commerce sites.
This compared to a conversion rate of 3.13 per cent for organic search results, defined as non-paid or natural search engine listings, during the same January-to-August 2006 timeframe.The study analysed more than 57 million search engine visits. Order conversions occurred during the same session.
When you consider that some organic search queries are non-conversion oriented, and often far off target, this does not bode well for the value of paid search. Keep in mind that this data is from people using higher end analytics products too.

In a somewhat convoluted way
this seems to bear out earlier studies (don't have those links handy right now, sorry) that indicated organic search results were actually converting significantly better than paid results.
True, it's primarily the white noise factor ranging from off target queries to typos etc. that seemingly degrades them, but considering that well managed paid search is so highly pinpointed the results are actually quite abysmal.
A rose my any other name
Depends on the slant huh?
http://clickz.com/showPage.html?page=3623514
It's everywhere...yeeeeeaaggghhhhhhhh
Let's remember Organic listings get more traffic so the MEAN figure for gross conversions is higher for organic is it not?
Organic listings get more traffic
If you happen to rank well, they do, sure. But let's not forget that PPC from its very inception catered primarily to a clientele that wasn't capable of achieving organic rankings in the first place.
No reason to assume that has changed in any way, heh ...
What's Really At Play?
It seems like there are a lot of factors here.
Does this study hint at the fact that the engine's algorithms are simply better at delivering relevant content to users than the people that manage paid search for their customers (us)?
OR, is fantomaster's comment correct in that high-ranking organic sites probably have made a decent investement into their site, and these sites are converting because of more refined content and better quality (usability/design, etc), when compared to some companies that do PPC that may pay less for poorly designed landing pages, etc.
I think the PPC people
I think the PPC people probably spend far more in terms of pure dollars, but I am not sure that they make better marketing "investments". But keep in mind this is a comparison between a subset of sites doing both
The Alternative
Is pull the PPC ads and let your competitors have those customers.
Yup, that's much better.
marginably effective?
is it possible to draw that conclusion from an article that compares conversion rates without any cost data?
and yes, there is a cost to gaining organic rankings, whether it be time, paid links, whatever....
Sure there are costs to any
Sure there are costs to any exposure, but if organic rankings are as margin compressed as paid search then the person in charge of that aspect screwed up.
not sure i follow what you
not sure i follow what you mean. can you clarify? are you saying that organic rankings should cost less than paid search, when done *correctly*?
yes
that is what I am saying.
Now lets say you sell a niche local legal service or something like that and there is little competition. In those rare types of cases PPC may be cheaper, but for most businesses EFFECTIVE SEO should be cheaper and more reliable than PPC IMHO. Although it is nice to use both such that you can adjust your PPC spend to accommodate for any shifts that occur with your organic placements.
cool. i can understand why
cool. i can understand why you would argue that, and i do think you should use both.
however, i think a lot of seo's undervalue their time and effort put into building templates, tweaking code, communicating for acquiring links, paying for links, reading blog after blog about the latest algorithmic changes, etc etc. it's a lot of work (i do it too). so, i think, when you measure true cost vs true cost, it's much different than people would assume, despite the hard cost, both initial and ongoing, to paying for ppc traffic. imho.
Interesting discussion.
Interesting discussion. Anybody else see Google organic placements tank as soon as AdWords is started for the first time? I see it too often to be coincidence. That suggests it is not so simple to "do both".
I agree with both Aaron and catchafire here. Organic SEO is high cost, and results are more cost-effective and reliable than PPC in the markets I serve. Since so much of the organic SEO I do involves business consulting and coaching, there is both an added value and an added cost tacked on to organic SEO efforts. How do you compare that to PPC? Does anyone execute PPC to a raw landing page? Organic SEO without a care about conversions?
The best I can compare is to say when I run PPC and provide organic SEO to the same project, the organic SEO is more cost effective inside a year's time. That remains true if I outsource the PPC to a specialist.
organic SEO is more cost effective inside a year's time
Which is the point, really: if successful and well maintained, it'll stick far longer (making it a lot cheaper esp. in high-cost PPC environments) and may help boost branding as well. Trying the latter via PPC can easily backfire terribly plus the costs are usually prohibitive.
good question john. i
good question john. i actually do a lot of the 'business consulting' with my clients as well. I mean, so much of this is helping people craft the right offer for their business model, and then constructing it in a way that converts well with the customer. i prefer not to execute PPC to a raw landing page, but rather incorporate landing page elements into each and every page so that they can all convert.
in the last year, with the adwords quality score changes and such, the onsite work for SEO and PPC are becoming one and the same, imo.