The Battle of PPC vs. SEM: Part 2 of 3
by Scott Gardner
In Part 1, we overviewed the pros and cons of Pay-Per-Click
listings and Search Engine Marketing. Now, let's take a closer
look at the PPC model:
Are You The Average PPC Client?
The following is a case study into one of the most popular PPC
models. To protect this company's best interests, this study
does not include their URL or the exact keywords they are
bidding for on this popular PPC model. This information was
derived from their stat logs, for one day's activity.
Below is a summary of seven essential aspects of this company's
PPC campaign: total keywords, total searches, total received
traffic, click thru rate, total missed traffic, average cost per
visitor, and total cost. This analysis breaks down the efficiency
of "Sponsored Listings", specifically for 7 of the 50 primary
keyword phrases that they utilize. All of these keywords were
in bid positions #1 or #2:
Total Keywords: 7
Total Searches: 3228
Received Visitors: 404
Click Thru Rate: 12.5%
Missed Visitors: 2824
Average Cost per visitor: $0.29
Total Cost: $117.00
Note: The above information was compiled from only 7 of 50
keyword phrases that this company bids for with their PPC model.
As a result, their daily costs are much higher than shown above.
Let's take a look at the total number of searches that were
performed in one day for the 7 keyword-phrases. Of the 3,228
total searches that were performed in one day for these 7 keyword
phrases, this client only received 404 total visitors and they
are in the #1 or #2 positions of the Sponsored Listings. As a
result, they missed 2,824 total visitors in one day, or 87% of
the available traffic.
To dig even deeper, for every 1 targeted-visitor they receive,
they are missing 7 targeted-buyers!! If these averages hold true
for 365 days of the year, then this client should expect to
receive 147,000 visitors if they continue to bid for the #1 or
#2 positions for just these 7 keyword-phrases. Looking long-term,
if they strictly depend on PPC for their Search Engine traffic
then their concern is now two fold: 1) They will miss ~1,029,000
visitors over the course of 365 days (The 1:7 ratio) AND 2) They
will spend $40,000+ to miss 7 times the traffic ($117/day x 365
days).
So, where are these 1,029,000+ visitors going? They are going
to the main results of the search engines and finding those
companies most relevant to their search; the ones the search
engine has chosen to be the best match!
According to comScore Networks, the number #1 & #3 used search
engines in the US are Google and AOL, as of May 2003. This study
found that Yahoo! and MSN combine to reach about 40% of the
user market, while Google & AOL combine to reach ~ 50% of the
searching traffic. The Overture PPC model does not reach the
traffic that uses Google & AOL. If you are not using Google
Adwords, or more importantly, are not ranked on the first page
of Google's & AOL's main search results, then you are missing an
exponentially higher amount of targeted traffic.
After reviewing the above PPC case study, let's sit back and
reflect on this industry-driven model. It is painfully obvious
that your competitors' bids have reached an out-of-hand level.
Why would the trend of continually increasing bids come to a
screeching halt? Even if it plateaus, it still is a high visitor
acquisition rate for thousands of companies. What is your option
for qualified, highly targeted buyers at a reasonable rate?
There is only one other viable approach when it comes to search
engine traffic: Search Engine Marketing, not Search Engine
Advertising (a.k.a. PPC).
How To Reach The Majority Of Search Engine Traffic?
Throughout the entire process, your company has one primary goal;
reach out to the targeted buyer and pull them into your website.
A point that we covered in the previous article (Part 1 of 3
http://www.sitepronews.com/archives/2003/aug/1.html) was about
putting yourself in the buyers' shoes; why not put yourself
right in the buyers' path? Of the thousands and millions of
pages that are somehow related to a given search query, the
first 10-15 main results combine to make the popular path that
SE users have known for years. The users perspective of the main
results is that these 10-15 websites were chosen to be here; they
did not buy their way here. When your website reaches first page
positioning in the main SE results, you have your website
directly in their path; or as I like to phrase it, sitting in
'the eye-of-the-hurricane". Again, relevance is king when it
comes to your buyers' click-thru decisions. This, without
question, plays a critical part in your company's ability to
capture the visitor and convert that targeted buyer into a
paying customer.
It is imperative that you find a reputable Search Engine
Marketing company that has some, if not all of the following
traits: excellent track record, exceptional testimonials, proven
growth, long-term stability, expansive resources, client-friendly
contracts, and unparalleled vision. Unfortunately, many so-called
SEO firms have burned thousands of companies in the past with
very low cost services that produce minimal rankings, traffic,
and revenue growth. Do your research and hire a company that has
a large staff of entrenched, industry-leading experts, all
dedicated to the search engine ranking process.
Our clients are strongly positioned in the first 3-5 results of
the true search engine matches, out of millions and millions of
pages. Being #1 of 2,500,000 website pages means a lot more to
the search engine user than being #1 of 3 paying advertisers.
Even being #3 of 2,500,000 pages carries more weight with your
targeted buyer than being #3 of 3. If you are a company that is
in the fortunate position of a healthy Internet marketing budget,
then you should definitely utilize both models. If you are a
company that has a tight budget, that requires fixed costs & the
best ROI possible, then you need Search Engine Marketing as the
foundation of your traffic.
Stay tuned for The Battle of PPC vs. SEO: Part 3 of 3. We have
evaluated the PPC model and touched on Search Engine Marketing.
Part 3 will cover additional benefits of having your website
positioned in the main SE results through the art of Search
Engine Optimization.
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Scott Gardner is the Director of Sales for WebSourced, Inc
(parent company of KeywordRanking.com
and ProRanking.com
< http://www.proranking.com/>), leaders in Search Engine Marketing.
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