I’ve sensed a fairly dramatic change in the attitude of SEM Practitioners to the relationship between organic and paid search in the last six months. Not a year ago, I think most PPC Buyers took it as close to an article of faith that there was no reason to seriously track organic placement when making PPC buys. The prevailing attitude seemed to be that organic search was either complementary or unrelated to PPC search.
Increasingly – and with good reason – I think that attitude is falling away. It’s implausible – on the face of it – that PPC campaigns and organic placements won’t sometimes cannibalize each other in ways the SEM Practitioner neither intends nor desires. How, really, could it be imagined that they wouldn’t?
I used to have this discussion – unsupported, I’ll admit, by any data better than common sense – and generally got no where. That’s changed. First, we had the opportunity with one of our clients to really test some of the relationships between organic and paid search. And secondly, I’ve found that many of the more sophisticated PPC buyers have independently arrived at similar place or share similar concerns about balancing paid and organic programs.
Nothing speaks louder (for us anyway) than real data. One of our clients felt the same way. A Fortune 500 company with a significant stake in the web channel, they had been running a substantial PPC campaign for quite some time. On the whole, they were pretty satisfied with their traffic and conversion from PPC – but they were also aggressively pursuing SEO opportunities and wanted to understand how they should think about the two aspects of their program.
They went dark for a 10 day period (keeping almost every other aspect of online marketing constant) and tracked the resulting organic traffic. What they found was startling – but also what we’d long expected. During the dark period, their organic traffic on many words grew substantially – in some cases by more than 50%. In fact, for some search engines as a whole, the cannibalization was 50%. That means that the PPC program was having a very large depressing effect on organic results. It also meant that some of the words being purchased in PPC campaigns were actually costing much more – per incremental click – than it appeared on a simple examination of clicks/cost.
Where was the effect largest? As you’d probably expect, the cannibalization was strongly correlated with organic position – the higher the position the more cannibalization (we didn’t study PPC Position since the client was generally in one of the first two slots). It was also most marked for Brand terms.
Brand terms are the ROI savior of many PPC programs – typically providing the lowest cost per click and the highest conversion rate. But in this case, at least, the real cost was often double the apparent cost. It wasn’t as if the PPC program wasn’t driving incremental volume on these words. In almost every case (there were a few exceptions) there was incremental lift from PPC.
But with sophisticated buyers increasingly relying on automated PPC buying systems, the difference between paying $0.60 and $1.20 per click can make a dramatic difference in optimization. Since automated trading systems don’t account for organic placement, they practically guarantee mis-optimization for clients with any significant organic presence.
I heard this theme echoed – to my great pleasure – at lunch recently with a top SEM Manager in one of the most competitive SEM marketspaces. They had pulled “brand” terms from their automated buying system because of just this concern – and they managed these terms separately from the rest of their buy.
That’s a good move – and one I expect more and more savvy SEM Marketers to be talking about as the relationship between organic and PPC programs is better understood.
Organic cannibalization is by no means limited to “brand” terms, however. And with more and more high-end programs managed by automated systems, the optimization error potential is getting larger and larger. It’s a rare case where the most sophisticated practitioners are getting burned the worst – because they are not longer relying on the natural intuition of a buyer. And while machine optimization is great – it only works if you’ve given the optimizer all of the relevant variables!