The big picture: Paid and organic search interaction

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How should my SEM budget be allocated? How much should go towards paid rather than organic? These are the questions that search firms hear time and again from clients. Best practices say that in order to truly see a significant ROI, you should use both PPC and SEO as a complement to each other. But conventional wisdom also says that if you have strong organic results, you do not necessarily need to do paid; conversely, if you don't have fairly strong organic results, you must do it. However, for the majority of marketers, the question really revolves around whether or not to invest in paid if you start get­ting good organic results.

While conventional wisdom says that paid search will unneces­sarily cannibalize “free” organic traffic, there are merits in favor of maintaining your paid campaign, such as greater control of messaging through ad text and landing pages. Marketers should evaluate their need for both (once good organic results are achieved) in terms of the incre­mental value of paid alongside organic. You can't consider organic and paid in separate silos. You have to measure the extent to which paid and organic either complement or cannibalize each other. This leads to other questions — if you are running both paid and organic campaigns, are you generating more clicks and con­versions than you would have otherwise? If so, are you seeing a significant ROI as a result?

To answer this last question, marketers must calculate the costs of the incremental clicks and conversions and measure their worth from two standpoints: the incremental cost of the conver­sion, and the extra volume it generates.

If good, above-the-fold organic results are present, the true effects of how a paid campaign affects click-throughs and conver­sions can be measured by purchasing a paid ad and testing it in various positions (top or bottom of the paid results). The same method can be used if organic results are “below the fold.” The goal is to measure the conversions for both the organic and paid campaigns, and to estimate how many organic conversions you would get with and without paid search.

Other considerations must be taken into account, such as the estimated cost of implementing an organic campaign for “high value” keywords; the cost of ongoing SEO efforts; and the speed at which SEO efforts can occur in reaction to competitive activ­ity. Perhaps paid search is the more rapid, more flexible and less organizationally traumatizing way to go. But the heart and soul of the “big picture” remains data, plus a willingness to test your assumptions about how organic and paid search interact.

Pat Stroh is VP of analytics and decision support at Impaqt. Reach him at pstroh@impaqt.com.

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