Bidding WarsChris is at two for two: his second webcast in two weeks has been extremely valuable, as always. Thanks to Chris, SearchMarketingNow, and iProspect for the opportunity to listen in and learn. :)

Today, Chris talked about mixing paid and organic listings. Is it worth pursuing? What are the benefits? Keep reading!

Overview
I am going to talk about definitions and critical differences between paid and organic listings. There are two fallacies and two important concerns. How do you achieve a balance between the two? I will discuss why paid and organic listings are both important parts of a search marketing campaign, and I’ll then give tips on how to balance the two.

Definitions
Organic listings:

  • Natural search results that are derived from the full text of all pages found on the web
  • The position result is determined by search algorithms that consider dozens of factors: keyword density, meta tags, etc.

Paid listings:

  • Carefully worded advertisements consisting of a 2-5 word title (call to action) and two very short lines of text
  • The position on the search result is determined by what people pay

Illustrations (screenshots of search results on the big four engines):

Google: If we look at the Google search results, “Sponsored Links” is on the top and right hand side. On the left side under the blue background, you will see organic listings.
Yahoo: The layout is similar. Sponsored listings are called “sponsored results” and they are located on the top and right hand columns. Organic is on the bottom. Google tries to reduce the number on upper left, but Yahoo likes a little more.
Microsoft: It also has a similar layout. Sponsored listings on the left are called “sponsored sites.” The right hand column is interesting: Microsoft differs from Google and Yahoo in a fairly significant way. The upper right hand column instead has a search refinement suggestion — ways to modify the search for better results. That pushes the sponsored results listings lower but does well for them. Studies have shown that on Microsoft, users prefer sponsored listings. You would have a good impact advertising on Microsoft.
Ask: There are only sponsored listings in the top 3 positions. There are no right hand sponsored listings at all. They took this Microsoft concept of query refinement to a much greater extent. If we scrolled to the bottom, you’ll see an additional set of sponsored listings. Consider sponsored listings as bracketing – top, right side, and bottom – with at least the major 4 engines.

What are the crucial differences between organic and paid listings?

These are important, especially when you’re at the early stages of creating your search marketing campaign. What effect, what impact, and what purposes do these campaigns have to get optimal results?

Organic listings:

  • Extracted by search engines from many locations: meta tags, description meta tag, directory listings (ODP – but that became an issue of intention for some marketers – people didn’t like that the editors were using the wrong language – so there became a standard called NOODP so search engines could see this and allow the engines to extract a description from other parts of the page), or from snippets of text on the page (that’s what’s used sometimes instead when NOODP is specified). If you write a benefit statement, a compelling description, you might see that instead.
  • Because you dont have control, the marketing message may or not be cohesive.
  • In some cases, you have very little control in what’s listed.

Paid listings:

  • Total control because it’s written by the advertiser. It can be carefully crafted messages.
  • “Virtually” total control – increasingly, especially with Panama, it used to be that paid listings were something that you paid the most and got the top listing. Now, search engines have introduced quality factors in determining which results are displayed, and so on, and so you have less control. If you work with an agency or firm that understands these guidelines, you can regain that control, so it’s not a bad thing. You should understand what search engines want in terms of relevance, search experience, etc, and this will be good for you.

Two fallacies with Paid Listings
“I don’t need paid listings if I have top 10 listings in organic search results.” Why should I pay if I already am successful?
“I don’t need to waste time and money chasing fickle organic search listings when I can get instant top placements with paid listings.”

The reason why this is the wrong judgment is because there can be an algorithm shift and a restructuring of pages. The organic listings may not attract the same kind of clicks that the paid listings do, but it depends on the search engines.

Two Important Concerns When Considering the Mix:

  1. What are your search marketing goals? What are you trying to accomplish? What kind of budget do you have? This is a recurring theme in Chris’s webcasts – you really need to ask yourself these questions. How do we know how to find the optimal mix if we don’t have set goals? Get the types of goals – people you want to reach, etc. Focus on them in the most appropriate way.
  2. What is your target audience actually doing when they’re searching? In other words, what behavior are you seeking to target in your search marketing campaign? So often, people might want your service but come from an entirely different perspective than you anticipate. It’s an effective way to get people to understand their needs to satisfy them.

Why are both paid and organic listings important?

The most important reason is that search engines are like slot machines: you jam in keywords, and wait for a payoff. You can control your own search marketing budget, control of your own search engine destiny, factor in different types of competition, appeal to different types of searchers at different stages of the conversion process, and increase brand awareness.

Let’s look at these in detail:

Control of your marketing budget – it would be nice to spend unlimited amounts of money on search marketing. There was a study released yesterday from a major research company saying that people are dropping television advertising; instead, that advertising is going online. They didn’t say where, but I would be willing to bet that a good chunk of that money is going into search marketing. This is a beginning stage of a massive shift from traditional media.
If you have paid and organic results, you can perceive these changes and allocate resources appropriately.
Organic is typically a one time fixed expense, usually to a search marketing firm. When I say “one time fixed expense,” it’s not that you won’t want to continue doing it, because you will: as you know your searchers, you’re going to want to add features, subtly change things for better experiences, and get an increased payoff.
Paid listings require ongoing, typically variable payments, often to both a search marketing firm and to one or more search engines. It’s difficult for business owners to put on a hat and juggle a campaign because there’s so much competition. You should seek out professional help.
Bottom line: think of “buying” vs. “leasing” search engine traffic that hopefully will have continuing dividends over time. In “leasing,” the moment you stop making payments, you don’t get that return. Just like a car, you’ll lose that car after you stop paying.

Control your own destiny – top rankings may or may not be permanent. Changes in the algorithm, strong deep-pocketed competitor, hiring top-notch SEO competition: these are factors that could affect the rankings.
If you have both paid and organic listings, you have your hands on the “balance” controls. If you have this and you have a budget to work with both, you can tune the degree to which your listings appear on one side or the other.
You can focus efforts on both popular and less popular “long tail” search terms. Bid on them in an advertising way – easier and more effective than making this change in SEO and not knowing if it will pay off until time passes.
Both provides peace of mind – an insurance policy in case circumstances changes. You are covering yourself and being more prudent.

Different types of competition
On the organic listings side:

  • Good SEOs can sometimes “bump” top organic listings
  • In extreme cases, spammers can hijack high-quality page rankings

On the paid listings side:

  • Competitors can be brutal, coming from deep-pocketed rivals, ego-driven rivals, or in the worst case, stupid rivals. Brutal competitors throw money at it and dont really care. Thus, it becomes difficult to compete. Ego-driven competitors might want to be #1 and will spend it to get there. It’s not savvy or intelligent but it happens. The worst case competitors are idiots who honestly don’t have a clue what they’re doing but they do have money, cranking bids to irrational levels. Legal and insurance or medical fields are like this.
  • Keyword inflation can make some words unaffordable. This is a trend that is increasing.
  • Fathom Online Keyword Price Index (KPI) monthly in media post – www.mediapost.com. This shows the average price for a dozen key categories and whether trend is up or down.

What kind of search listing do users prefer? This was a study provided by iProspect.
People’s behaviors vary by search engine. They saw that Google users preferred organic results 72% of the time and paid results 28% of the time. For Yahoo, the breakdown was 61% (organic) and 39% (paid). AOL had an even split: 50% organic and 50% paid. Microsoft users were inclined to click on organic listings 29% of the time and 71% with paid listings. All engines: 61% organic and 40% paid.

Searcher behavior
When people search, they’re not having fun. They have a need and they need it to be satisfied: they seek information, or they want to find or research a product. They are engaging with search engines to get something back.
Enquiro did a study on searchers who have a goal of buying. They saw that searchers are in a “buying funnel” with 4 stages of this funnel:

  1. Awareness. People are prodding, scanning listings, going to pages 2 and 3. They want reassurance that what they are doing is the right thing. You want to have site content for this. You don’t want a call to action for this kind of person at this point, but give them information that reassures them.
  2. Considerations or research. They know a little more, they are sure of what they’re doing. Your messaging should change.
  3. Decision. I’ve gathered my information, I’m looking at my confidence, and I know what I want.
  4. Purchase. Right now, 90% of people still purchase offline at brick and mortar stores, but online, we need to see this – people are ready to buy. Carefully consider your messaging in paid and organic listings for this, but cater to those early people. Lure them in with a succinct ad offering incentive. Maybe a mix or blend will go through this entire funnel.

Most searchers go back and forth between organic and paid listings.
Brand awareness
There was an IAB Nielsen//Netratings Study that showed that 27% of searchers were more likely to name a brand if it was in the #1 position of paid search results. Even if people aren’t going to click there, if they see the link, it tends to reinforce the brand awareness. If it wasn’t in the #1 position, it tended to drop off. This is the exception of the #1 fallacy – the higher you are, the better off you’ll be (not from a conversion standpoint) but for the brand reinforcement aspect.

Illustration (screenshot): Chris shows us a screenshot where an advertiser has the #1 result in both organic and paid spots. This gives the impression of solid business that is likely to be around. It reinforces trust and well-being that I will not get from other advertisers.

Here are some tips

Paid listings:

  • Think of that as leased traffic: it is best in general for short term or seasonal campaign. Turn it on at a specific time and turn it off after you accomplish a mission.
  • Popular keywords are expensive, and you’ll have plenty of competition. Example fields are mortgages and jewelry. It is a little less expensive for consumer products.
  • You therefore want to leverage “matching” options for maximum effect: broad match (default match type) isn’t always the best. Don’t take what the search engines give you by default. You’ll want to investigate matching option – phrase match, exact match, negative match. (Watch or read last week’s webcast transcript for more information.)
  • You can also use geotargeting for specific geographic areas.
  • Consider bidding on less popular keywords, such as those out there on the search tail. People who want to be more specific are farther along in their buying funnel. You might see less traffic but people are more ready to buy at that point.
  • Use paid listings to test effectiveness of keyword candidates. This seems counterintuitive. However, consider this rationale: “I’ve got these words I want to experiment with, but I don’t want to spend effort optimizing my website and wait awhile – I want to be more confident that they’ll work.” A paid test campaign allows you to see if people click on the ads. If they are, incorporate them into the SEO process.

Organic listings

  • Focus on your core message/products. You’re not going for the call to action/quick hit. You want solid content that focuses on your core messages and services.
  • Target the “evergreen” content. Unlike paid listings which is seasonal, this content will always be useful no matter what season/time of year. This helps achieve and keep ranking.
  • You want to be patient. It takes time. When you begin, use both paid and organic listings if possible to assure SOME exposure.
  • Unless you’re going for brand awareness, taper off paid listings as your organic listings become highly ranked — unless you have excellent ROI with paid listings. Don’t drop paid altogether, but here’s the point — when organic kicks in, you can put your hand back on the “balance” control and see where you should invest your energy
  • Try to continually add fresh content that’s optimized to your site, for an overall boost. Those sites that continually add content always does well in results and improves linkability.

Tips for both paid and organic listings

  • Keyword research is crucial: study your logs! Take advantage of that. It’s in the data! Take it and start today.
  • Get fantastic keyword tools – Wordtracker.com and Hitwise Search Intelligence are excellent keyword research tools- the latter studies user search data for about 10 million users.
  • Drop or change keywords that convert below a specific target. Don’t be married to particular words. Get new ones!

Conclusion
Paid and organic listings serve different purposes in your search marketing campaigns – different audiences, different times, different aspects of their search (awareness, or whether they’re ready to buy). Get an appropriate mix. You’re trying to appeal to different people on a whole spectrum of needs and wants.
The bottom line is that paid and organic links complement each other. They aren’t exclusive. Think of this balance. Once your campaigns are running, use that control. Dial in and dial out to get the maximum effect possible.

Questions:
Question: How should we choose our organic or paid listings? Do we have to look at searcher behavior?
Answer: We don’t have all the budget in the world. How are you going to allocate the resources? What is your content? Describe content, include a FAQ, testimonials, allow searchers to learn about the product on the website but not necessarily to drive a sales effort. But if you have a store with low-margin products, you won’t invest a whole lot in the organic side of things – you really want people to buy. So paid listings may be your best bet. What are you trying to accomplish? Get in the head of the searcher and understand what they need.

Question: In one of the screenshots, you showed that TripAdvisor had 2 top listings? How is that possible?
Answer: What is likely going on there is that one of the ads is TripAdvisor itself and one is an affiliate that is using the URL. This is a somewhat old screenshot. I am not sure if Google allows that to happen.

Question: Is there a difference of targeting between business-to-business (B2B) and business to consumer (B2C)?
Answer: On a fundamental basis, it doesn’t matter if you’re doing B2B or B2C. You want to create good content, get a good linking pattern, and that’s core to any website regardless. It changes a little bit on the paid side. B2C where you try to sell to consumer, so you can have ads that will grab people’s attention, where they’ll click and buy. With B2B, it gets trickier, but I wouldn’t ignore the ads. Use ads to prequalify them for something. A common technique is to offer a white paper, or a tool, or a free sample – get people to click through: sign up (don’t capture a lot of info right away), get them started in an interaction with your company. Have a teaser that will establish long term conversation with company. I’ve also seen ads for GE Finance offering commercial credit loans – requiring at minimum $10 million – they were using that copy to qualify their users so that they would not get low-quality clicks and weed out people who would not qualify. It goes back to your own goals.

Question: Do you believe it’s more effective from a direct response to rank in positions 3-5 than 1-2?
Answer: Enquiro and iTracking did some research on these issues. About1.5 years ago, there was a study about Google where they saw a “golden triangle”: the top 3-5 search results in the organic side were preferred but 1-3 was desired on the paid side. It is effective targeting on Google. 2 months ago, this research was expounded upon with data from Yahoo and Microsoft. Searching patterns there is different. Yahoo users in particular go down farther on the page. Microsoft users skew toward the paid side. If you are targeting these types of things, consider on a paid side, it’s a different strategy for each engine, not because of the research. Just do the best job you can – - if you do it properly, you’ll get in the top 10, and that’s the key for most searchers anyway.

Question: Earlier in a polling question, you said that targeting under 500 keywords would mean that you are a “beginner.” That’s not necessarily true. Also – Is it a good reason to limit keywords, especially long tail?
Answer: People who are just starting out get intimidated and overwhelmed by having more than just a few keywords. I think the total number of words goes back to your goals. Some people who manage millions of terms are retailers who manage tens of thousands of products. eBay, for example, literally has millions of products – their search marketing staff probably is in the thousands of people. Scale back from that where you don’t have a whole amount of words, especially what people search on. Examine your logs, use some of these keyword research tools for effectiveness, and in the tail terms, the less common terms – combine them, create phrases that are longer – use terms with other words. Do a prequalification of terms – encourage people who are farther along to engage with you in a direct way. Don’t willy nilly target keywords. People hate clicking though thinking it would be useful but the link they click on is not what they wanted – this is lack of relevance. The goal is to get people through and have engagement with them, not to trick them.

Question: With paid listings, it is very easy to track ROI. With organic, it is difficult to track and it’s difficult for us for funding. Is there any other way to to track organic?
Answer: It’s not as precise as paid listing, but there are tools to do this. Some measurements are an increased conversion rate or traffic. Your goals may need to be defined more concretely, and you might need different metrics. If people sign up, download the whitepaper, or whatever is necessary, it is not as precise ROI, but it will give you ammunition to show that it’s working.


Posted by Tamar Weinberg at 2:31 pm
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