April 2005 Monthly Newsletter :: Anduro Marketing
Why Use Paid & Organic Listings?
As the use and understanding of Search Engine Marketing (SEM) in the marketplace grows, a number of important questions are being brought to bear. One of the most common queries that has risen relates to the differences between paid and organic SEM techniques and how best to use one, the other, or both. To properly address this issue we'll need to take a closer look at these distinct Internet Marketing methods.
What Are Paid & Organic Listings?
Briefly, paid or sponsored listings are targeted Pay-per-Click (PPC) advertisements sold by most search engines, the largest being Google's Adwords and Yahoo's Search Marketing Solutions (formerly Overture). In Figure 1.0, the paid listings are the ones highlighted at the top and far right of the screen capture.
Figure 1.0 - Paid & Organic Listings
These listings are referred to as PPC because they generate instant traffic by reserving selected keywords and phrases bid on for a given company. Using these selections, they present the customized search engine advertisement when specific phrases containing those specific keywords are entered. The bidding company only pays if someone clicks through to their website. Depending on a company's budget and choice of keywords, paid campaigns can carry monthly costs anywhere between several hundred and several thousand dollars.
Natural or organic listings appear in the lower left of Figure 1.0. These are listings gathered by search engine spiders and stored in a search engine's index. While it costs nothing to be among these listings, it takes a significant amount of time (up to a month in most cases) to be picked up, and if a website is not properly optimized, it may never show up, or at least not within the critical first 3 pages of results.
How a website ranks in terms of organic listings depends primarily on how relevant a search engine spider considers a given page. Relevancy is measured based on a variety of factors including the use of keywords, optimization, coding and file structure, and so on. While there is much to consider and debate, one thing is sure. The factor which has the single largest impact on website relevancy is the number and source of inbound links to a given site.
Which Method Is Best?
Knowing the difference between the two types of listings, one could easily ask, "Why would I go through all the work of attaining natural listings when I can simply buy high ranking results?" Alternately, one might also question the value of paying for ranking when it can be achieved at less cost. There is no simple answer to these questions, but a clearer solution can be obtained through a basic understanding of the advantages and disadvantages of each method, along with a precise understanding of a company's SEM goals.
Aspects of Paid & Organic Listings
Making use of PPC listings gives you the highest level of strategic control over your SEM efforts. You get to choose the keywords you want to target, the text for the advertisement displayed, the destination URL of that advertisement, and how much you're willing to pay for high rankings. Essentially, the sky's the limit! Corporate spending on paid search engine advertisements has skyrocketed in recent years and is expected to reach a billion dollars by next year. Figure 1.1 illustrates this point.
Figure 1.1 - Paid Advertising Spending
The ability to specifically measure the results (including ad views [impressions], ad clicks [click throughs] and consumer response [conversions]) is a major benefit of paid marketing campaigns. However, it is important to be aware of the limitations of paid listings. To begin with, they're not as popular with searchers as natural listings. This is due to the fact that they represent a form of intrusive advertising that some searchers may reject in favour of "unbiased" natural listings. Past study has shown that the average user finds natural search results most relevant in Google and Yahoo, while MSN users prefer paid listings. Also, most paid listings fall outside the "Golden Triangle" shown in Figure 1.2.
Figure 1.2 - Google's "Golden Traingle" (Source: Eyetool)
This "Golden Triangle" represents the visual priority users ascribe certain areas of the screen. It can be seen clearly that information presented in the top left corner is of prime importance. Most often, this is the domain of natural listings. Natural listings have the trust and priority of most users, but they also have drawbacks. While the upfront costs may be significantly less than paid listings, it often takes a lot of work, best performed by professional SEM firms, to attain high ranking. And while properly optimized pages may generate better rankings over a longer period of time than paid advertisements, eventual maintenance would almost certainly require more effort than needed for a paid campaign.
Further Analysis
The statistics point to an inevitable conclusion, subscribing to one method exclusively severely limits the effectiveness of a SEM campaign. Making efficient use of a balanced paid/natural solution insures maximum exposure and the greatest chance for increased traffic. Focusing on both allows allows you more budget flexibility, giving you the option to aggressively target specific keywords through advertisement or to drop words from paid inventory as natural listings improve, almost like insurance. Spreading an Internet Marketing strategy over both segments also creates greater brand awareness as well as link association. Ultimately, the more a user sees your listings, the more likely they are to click through to your site and the more you'll stay in their minds.
Search Engine Marketing firms that offer both natural Search Engine Optimization and paid campaign management services can ensure their clients web pages are consistently found in both types of results in the major search engines, which leads to a more positive return on investment.
For more information on any of the products available from Anduro Marketing, contact us at info@anduro.com or (403) 410-3803.
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