Does an Organic Search Presence Help Paid Result Performance?

Study Finds Organic Results Increase Paid Search Clicks

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A study from a couple of NYU Stern professors has found that organic search engine results can play a direct role in whether or not a paid listing is clicked. Basically, if this research is any indication, if your business has both a paid result and an organic result appear at the same time, you have a better chance of your paid result getting clicked than if the organic result had not appeared.

Seen better CTRs when paid and organic listings are present? Tell us about it.

Professors Anindya Ghose and Sha Yang have highlighted the following findings:

- On average, the impact of organic listings on paid advertising is 3.5 times stronger than vice-versa, possibly because of the tendency of consumers to trust organic listings more than paid ads.

– The positive association between paid and organic listings increases advertisers’ profits by at least 6.15% when compared to profits in the absence of either of them. The positive association is strongest when advertiser-specific keywords are used and weakest when brand-specific and generic keywords are used.

– Click-through rates, conversion rates and total revenues are higher when both paid and organic listings are present simultaneously than when paid search ads are absent.

– The combined click-through rates are 5.1% higher when paid and organic listings are present simultaneously than when only the organic listings are present.

– The combined conversion rate increases 11.7% when paid and organic listings are present simultaneously than when organic listings alone are present.

– Paid search advertising drives up to 54% of total revenue growth.

Anindya GhoseThe professors used "a unique panel dataset of consumer responses to keyword ads on Google" to conduct their research. The complete findings from the study are evidently available in a paper entitled "Analyzing the Relationship between Organic and Sponsored Search Advertising: Positive, Negative or Zero Interdependence?" It’s 52 pages long.

"These findings have important implications for the incentives of search engines to strategically modify the rankings of their organic search listings in order to boost their revenues from paid search advertisements," says Professor Ghose.

Ghose’s point is an interesting one. Nobody’s making any accusations here, but would search engines tweak organic results specifically with the goal of increasing the performance of paid results, and bringing in more revenue?

Some think the idea is absurd. For example, one WebProNews reader commented:

No additional CPC is incurred when an organic listing is present, and the CPC certainly does not change depending on the organic listing’s position. The PPC auctioning process has nothing to do with the organic SERPs.

Lastly, manipulating the organic SERPs in order to charge more for PPC clicks is cutting your own throat, from an SE perspective. In effect, telling advertisers: "You got a better organic position, therefore you will be charged more for your PPC clicks." Under which business model does this make sense? Exactly none. (respond here.)

Even if a search engine did engage in such a practice, it is highly unlikely that anybody would know about it. I think the larger point is still just that it pays to optimize your site for organic listings, even if you are paying for listings. This may seem like common sense, but it is easy to dismiss the time and effort that go into an optimized site if you think you can just buy your way to clicks. What are your thoughts on the subject? Comment here.

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Does an Organic Search Presence Help Paid Result Performance?
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  • http://www.seoconcepts.net Jason Carrasco

    This just reinforces what internet marketers have been saying for awhile now. Not only have I noticed this myself but if you attend any of the big conferences, the speakers will generally bring up this point. It is essentially the same online as it is in print, repetition helps. If an advertiser runs in a magazine they tend to be more successful if they are in more than one page and also when they run in multiple months. Repetition creates branding and trust. The same hold true for SERP’s.

  • http://www.RVMechanic.com Zane Good

    I have found that, because I have over 300,000 visitors per month coming from search engine traffic, the bulk of my income is derived from that. A great deal more than visitors that come through bookmarks, or from a referral, because they tend to click less on my ads than those who come organically.

    I have found this to be due to the fact that my ads are always related to my niche, and ads tend to be contextually relevant, which further satisfies the needs of the visitor. Good content creates good organic traffic, which creates good click-through on contextual ads.

  • Stupidscript

    The report and its conclusions point to data relating to the effectiveness of PPC campaigns from the perspective of the advertiser, “based on aggregate consumer response”, not from the perspective of any search engine. There is no information gathered to support any claims that any SE could possibly manipulate organic results in order to receive a higher CPC, as per the comment noted:

    “..to strategically modify the rankings of their organic search listings in order to boost their revenues..”

    In what way could that possibly happen? That statement from Ghose is called a “musing”, and it shouldn’t have been included in this article.

    No additional CPC is incurred when an organic listing is present, and the CPC certainly does not change depending on the organic listing’s position. The PPC auctioning process has nothing to do with the organic SERPs.

    Lastly, manipulating the organic SERPs in order to charge more for PPC clicks is cutting your own throat, from an SE perspective. In effect, telling advertisers: “You got a better organic position, therefore you will be charged more for your PPC clicks.” Under which business model does this make sense? Exactly none. Which is why mentioning this weird fantasy seems unrelated to the rest of the article, even as it runs the risk of scaring advertisers in some unidentifiable way for no discernible purpose.

    • Chris Crum

      Thanks for weighing in. I thought Ghose’s comment was worth mentioning since he was behind the study and that was his conclusion. I think it raised an interesting question, regardless of whether or not it is currently going on. I have actually updated the article with part of your comment to show a more balanced point of view on the subject.

    • http://PrSiteList.com Scott Moir

      I concur with the person who posted this logical reply, on every level..

      And let me add. Google Caffiene, which will be launched after January 1st 2010, didn’t demonstrate any such window for this kind of manipulation. In fact, the results appear to favor content rich, highly relevant, active sites and listings. (as opposed to older stagnant sites and Blogs). Which is exactly what you’d want to see if you’re an SEO or Internet marketing specialist. Or for that matter, the person doing the actual online search..

      Which begs the question. Has this profesor ever built his own website, got it indexed, optimized it, and then worked hard on getting it a higher organic ranking?

      Direct experience is the best teacher there is!


  • http://wpmagerview.org WordPress Mage

    I’m no scientist; I haven’t done ginormous studies; but I HAVE noticed that when I’m searching & see organic listings along with paid listings with the same url, it gets my attention.
    Isn’t advertising all about getting noticed?
    I do believe there’s some positive reinforcement happening there.

  • David Vallejo

    I don’t believe the professors were suggesting the SE’s would increase the CPC rates. I believe what they were alluding to was that the SE’s may manipulate the organic results in order to increase the CTR for the ads, which in turn would increase their revenue.

    • Stupidscript

      But the CTR would go down as the clicks went up, according to the existing algorithms at each of the major PPC vendors, leading to a net zero increase in revenue.

      In order for the SEs to generate MORE income by manipulating the organic results, they would need to start “punishing” some of their PPC advertisers, either by not giving them the organic bonus for poor, or less-effective, organic positioning, or by giving them an organic bonus for good organic positioning, effectively “punishing” those who did not receive the bonus.

      Any way you slice it, in order for a SE to generate more income for themselves by factoring in organic results positioning, it’s a crazy way to go, sure to generate lawsuits and messy algorithms.

      • Stupidscript

        CPC would go down as CTR went up. Sorry. Exposing the law of diminishing returns.

  • http://www.marketingloudly.com Mike G

    Does running a PPC campaign have any affect on your organic listings..?

  • http://www.cpasitesolutions.com Kenny

    I doubt there’s an algorithmic bias. It is logical to assume, however, that an ad linking to a page with a good organic listing would naturally have a higher Quality Score and would therefore pay less for it’s position in the sponsored listings.

    • Stupidscript

      As long as the landing page is the same as the organic listing, then they would share a common Quality Score. Is that likely, given differing optimization techniques for organic and PPC landing pages, though? Probably in most cases, for the time being. However serious PPC marketers would not fit that profile, with different landing pages for each ad that are not necessarily the same as commonly-indexed pages.

      Still trying to figure out IF and how Google would be able to increase its profit by manipulating the organic listings. It still seems unlikely and a bad business move, to me.

  • http://www.PoodleBreedersOnline.com Poodle Breeders Online

    This is totally true considering the fact that savvy Internet users and average web users trust organic search results better. Besides, the position of organic search results make it a target for everyday web user.

    I see a continue shift in this direction in the future. I believe is taken note of this study.

  • http://www.ezmousemat.com/store mat

    I think most ‘normal’ (and i mean not SEO types) people connect a high organic placing as being a reflection on the site/business and if you add into the equation, a PPC ad onto the same search result page you have automatically doubled your chances of a click anyway.

  • http://www.snerdey.com Snerdey

    There are so many click studies.. if your link is not in the targeted click zone it’s not going to matter where you’re showing up. Sure there are a small percentage that actually scan all the results on each page for a few pages but so many just click top left or right above the organic search results. Of course the sponsored ad’s are located there.. cause they know peoples click habits.

    Oddly enough our organic results are just as strong as our ppc ad’s.

  • http://www.techpubinc.com Rick – The Organic Link Builder

    Both are very unique techniques in its way, My company run SEO projects for around 25 customers we manage paid as well as organic SEO, I have noticed there is no such relation, but still we keep wondering if they might do such twits with couple of major accounts where you cannot notice or do randomly to keep their paid profits up.

    But we have been result driven as far as Organic Linking Building is concern.

  • Stupidscript

    I’ve finally slogged through the mess that is that report, and I’ve got to say … where can I get some of the funding that they got to write that piece of academic drivel? Seriously. “endogeneity” isn’t even a word!

    Here’s a quick extract, for those who have not yet committed to attempting to read the thing:

    “We also find that this positive interdependence is asymmetric such that the on an average the impact of organic clicks on increases in utility from paid clicks is 3.5 times stronger than vice-versa.”

    End quote.

    I guess that means that they found that … um … clicks on organic results are 3.5 times more likely to … um … no, wait … clicks on paid ads are 3.5 times more likely to … are 3.5 … are likely to click on an organic listing 3.5 times … um … are more than 3 times more likely to purchase something … um … never mind.

    I know, I know … some of you may believe that the writing gets stronger as the report goes on, and that I should grab a quote from deeper into the report to show that it really is well done. Okay. How about this longer one from Page 17? (emphasis mine)

    “We find that neither the presence of a brand name nor the retailer’s own name in the search keyword has a statistically significant effect on click-through rates in paid listings. However, in the case of organic listings we find that the coefficient of Brand is positive and significant (0.29) while that for Retailer is negative and significant (-0.58).

    Our analysis also reveals the coefficient of Retailer is positive and significant for conversions in paid search but statistically insignificant for organic search.”

    Need I go on? This report does not contribute significantly to the pool of knowledge on organic and paid search results, even when factoring in the endogeneity of its pluralism (unobserved heterogeneity).

    Now, about that grant money …

  • http://angiesbooknook.com/ Angie

    This article is WAY over my head! I don’t even know what an organic search is, much less algorithmic wassnames and most of the abbreviations. I am served much better by articles that speak more to the masses.

  • http://deck-boards.com Mr. Deck Boards

    It doesn’t really matter much because the smart folks with good sites don’t use PPC. It’s rife with fraud and doesn’t really reach customers. Less than 5% of people even look at the adverts in a SERP. Around 1% actually click in them.

    So why would I pay the thousands of dollars for those adverts?

  • http://www.pr-interactive.com florida web design company

    I don’t think it has any effect. I do like the article and the study is well done, but I disagree 100% with the analysis and conclusion.

  • http://thepilatesbiz the pilatesbiz

    closed? already? im heart broken..

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