Paid vs ‘Free’ Clicks: When to Buy a Keyword That Organically Ranks #1
Over the past several years, I have done numerous case studies with companies looking at the differences in their paid traffic when they also rank organically for a term.
In this column, I’m going to share some of that data and walk you through some simple calculations you can do to see if you should buy that keyword.
Running Your Own Experiment
When running your own experiment, you need two sets of numbers:
- Your traffic information when you are only in organic
- Your traffic information when you are in both
This is a very easy experiment to run, just follow these simple steps:
- Find a term you rank number one in the organic results
- Add that keyword as an exact match negative in your paid search account
- Benchmark the results over a week of time
- Buy that same keyword for a week
- Click through rates for your paid traffic
- Organic referrals
- Conversion rates
The length of time you need to run these tests depends on how much data you receive based upon budgets and click volume. If you have a small to medium budget, you might want to buy keywords for a week, stop for a week, buy keywords for a week, stop for a week and then aggregate all the results.
If you have a larger budget, and the search volume and conversion rates are fairly static, you might just run each test for a week of time.
As with any testing, the more data you have, the more confident you will be in the results.
The final analysis is to examine your revenue for each time period to see if your total revenue is higher for one period than another. Of course, subtract your paid search marketing costs from your revenue to see accurate pictures.
For this company, we ran several tests across various time frames and keywords. The results were fairly similar for almost every test we ran. Here are the results for one keyword:
In this case, you should be buying the PPC keyword as when you do, you pay $3422 in PPC costs, but that additional spend results in $7,395 in additional profit.
Over all the tests I’ve done, in the vast majority of cases (but by no means all) being in both the organic and paid results at the same time was a good idea.
I have seen some cases where it was not a good idea to buy PPC when you rank organically from a profit standpoint (there are other reasons to do it such as demand generation). Generally I see that happen for keywords that are early in the buying funnel and they are not high converting keywords, but more awareness and interest focused keywords.
What About PPC Cannibalization?
Another common complaint about buying paid search when you rank organically is that you will end up paying for clicks you would normally have received for free.
Again, some math can solve this problem. In the first example, we did examine the cannibalization number. The keyword we choose had consistent week over week referral and conversion information. There was some variance, but it was less than 10% over the past 3 months. To give SEO the most credit possible, we looked at the highest referral week in the past three months.
We then calculated the maximum ‘cannibalization’ clicks at 1,421 clicks. During that time frame we received 4,123 paid clicks. Therefore, even if we had removed all of the ‘other clicks we paid for and shouldn’t have’; paid search added another 2702 total clicks to the website. However, that number wasn’t one to really focus on. The concept to focus on was: the revenue was higher when both SEO and PPC were running.
Does SEO & PPC Convert the Same?
One of the advantages of paid search is that you can create dedicated landing pages that are solely designed for actions. This is not possible (or at least very difficult) with your organic efforts.
Another big question is: Does SEO & PPC convert the same?
The answer is: it depends.
I hate that answer as much as you do; but it’s necessary. The reason? It depends on the landing page and ad copy.
I was working with a large company that uses a lot of whitepaper download lead forms. Their marketing and design departments did not want to create PPC only landing pages because they already had lots of lead forms across their SEO pages and didn’t think it was necessary to duplicate their efforts.
The whitepapers were targeted to very web savvy audiences (like you reading this column) that knew the difference between organic and paid traffic. Since the audience understood the difference in traffic source, they didn’t think there would be any advantage to creating dedicated landing pages.
They had even done a test to see if there was a conversion rate difference being in both SEO & PPC. Here were their numbers:
This wasn’t a big difference in overall conversion rates based upon their traffic source (similar or same keywords). In fact, often I see larger conversion rate differences when you are in both SEO and paid search, which is often called the ‘halo effect’. Most likely their audience did know the difference between PPC and SEO and therefore the halo effect did not kick in as much to this type of an audience. However, I still thought they should test the difference.
Personally, I dislike when marketers say, “I think….”. I try to tell myself that whenever I say that I should stop thinking and start testing. Not every thought is correct and only testing will give you a good answer.
After a while, I convinced them to stop staying ‘I Think’ and to create just one landing page focused purely on conversions. We removed most of the navigation, focused on some bullet point benefit statements, and a simple lead capture form. Here’s what happened:
Even web savvy people enjoyed the conversion focused landing pages. They might be able to tell the difference between organic and paid search; but in the end, they do convert better with conversion focused pages.
In many cases, it is worth buying keywords even if you rank organically for them. Just create a simple experiment following the steps outlined above. If your total profits are higher when you are buying the same keywords – then keep buying them. If your profits are lower (and you are not buying words for other reasons), then do not buy them. It really is that simple.
However, creating dedicated landing pages is often a good idea – no matter the sophistication level of your audience. With SEO, your pages must have certain elements to rank well. With paid search, you can purely focus on conversion actions and not have to worry about a search algorithm’s opinion of your site.
Just remember, don’t just think about what you should or should not do: test your hypothesis and let the numbers tell the story.