Which converts better – organic search or paid search?

This is a big question with serious implications for online retailers in the months before the holiday buying season.

A recent article at Clickz throws some light on this topic.

Here is an excerpt:

The [WebSideStory ]study looks at traffic and conversion data from 20 business-to-consumer e-commerce sites during the first eight months of 2006. Paid search had a median order conversion rate of 3.4 percent, while organic search results produced a conversion rate of 3.13 percent. The data set included more than 57 million search engine visits.

There are arguments to support both sides, Rand Schulman, WebSideStory’s CMO, told ClickZ.

“On the one hand, because you control the message of paid search, you’d expect higher conversions. On the other side, because people value the ‘editorial integrity’ of organic, you’d expect higher conversions,” he said. “Ultimately you need to do both. I think the eye-opener here is that neither side has a significant edge.”

It would have been interesting to get some more details on the variables within the study.

For instance, were they comparing organic vs. paid, regardless of the position of either link on the page? In other words, did they compare an organic listing in position two with a paid listing also in position two? Or was the comparison between the two listings, on the same page, but regardless of position?

And did they compare paid and organic links which pointed to the exact same page? Paid links almost always point to an optimized offer page. But that often isn’t the case with organic links.

And were those 20 companies in the study of similar sizes? And did they represent a fair spread of industry categories?

However, putting aside those questions, and assuming the basic validity of the test, there is a big lesson to be learned here.

Keep your PPC campaigns going…but also pay attention to your organic search positions.

Remember, organic search traffic costs you nothing per click. So if you get the same conversion rate from organic listings, your net revenue could make a nice jump upwards. (Assuming you don’t spend an arm and a leg on search engine optimization.)

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