The Online Spend Disconnect – PPC And SEO « Datadial Blog
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Matt

November 17th, 2008.


Filed under Industry News,Pay Per Click,SEO

The Online Spend Disconnect – PPC And SEO

An interesting post over at SEOMoz highlights the spending disconnect that exists in the way that many companies allocate their online marketing spend.

Not surprisingly, search advertising should continue to be the largest category, growing from $9.1 billion in 2007 to $20.9 billion in 2013.
– Source: C|Net News, June 30, 2008

While the current spend on natural SEO?

SEO: $1.3 billion (11%)
– Source: SEMPO data via Massimo Burgio, SMX Madrid 2008

So, out of a total of around $10.4 billion spent on search, only $1.3 billion, or 12.5% is spent on natural search placement. Therefore you would expect the potential traffic from natural search to be the smaller piece of the pie, right?

Wrong.

Looking at the Google heat map we can see that it’s the natural results that catch the attention of users viewing the page.

This superior visibility is matched by the click through rate data,

The natural results in Google drive more than 70% of search traffic, though only account for 12.5% of online spend.

Why is this? Take your pick from any one or more of the following,

  • PPC is an easier concept for people to understand, there is a general lack of education and understanding of the SEO process.
  • PPC is quicker (almost instant) to get results and you only pay for traffic that you actually receive. There is a higher perception of accountability and control.
  • Traditional marketers pay far less attention to SEO, column inches in the business press given over to SEO are far less than PPC. Again this may well be due to a lack of SEO understanding amongst journalists.
  • There is a lack of trust in a segmented and unregulated SEO marketplace. A basic lack of understanding handicaps buyers and can lead to acceptance of poor advice and wrong buying decisions.

3 comments on The Online Spend Disconnect – PPC And SEO

  1. Jeff Howard says:

    I’ve created a video presenting a similar argument for SEO vs. PPC. I also point out PPC prices are always going to be on the rise. Here it is, http://catchsearchmarketing.com/organic-search-marketing-training-video/SEO-return-on-investment.html

  2. “Looking at the Google heat map we can see that it’s the natural results that catch the attention of users viewing the page.”

    But in most cases – the top of page is dominated by the 3 PPC ads? Therefore PPC gets most visbility?

    There should be a skew to PPC however because if you are truly integrating PPC and SEO – the cost efficiency of SEO should enable you to reinvest into PPC and drive even more incremental volume.

  3. Matt says:

    @Paul – Yes, with the PPC ads now being placed above the natural results you would have thought that would be the case.
    However, as these ads are still diplayed differently from the organic results rather than fully integrated a degree of ad-blindness kicks in.
    In the past when I’ve tested PPC and organic results against each other the ratio I see is somewhere in the region of 70/30 in favour of the organic results.

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