Many companies ask us whether it really makes sense to run a paid search campaign using keywords that are already ranking well organically.
A study conducted by Resolution Media and Kenshoo for a division of HP (Hewlett Packard) aims to settle this question once and for all: does paid search cannibalize organic results, or does it add value even when organic visibility is high?
The data analyzed in the research comes from the American market, covering millions of visits and accounting for more than $10 million in direct online sales revenue for each channel evaluated. The study's dataset included only clicks and visits in cases where both a paid ad and at least one organic result appeared in searches for the same keyword.
The survey's results showed that even when the company appeared in the first organic position for the searched keyword, consumers clicked and converted on paid links about 40% of the time.
It also found another very important data point: paid search drives 3.2% more net revenue per visit than organic search, even when accounting for traffic acquisition costs.
Click share by organic position
According to the chart above, even when the search result returns a link in the first organic position, the click-through rate on the paid link accounted for 40%. And, obviously, the worse the organic ranking, the more important the paid result becomes, with click-through rates reaching as high as 90% of the total.
Another very interesting data point was the comparison between branded and non-branded searches: for branded terms, organic performs better, with 53.4% of clicks versus 47.6% for paid. The story changes when non-branded terms are analyzed, with 77.2% of clicks on paid links versus 29.7% on organic ones.
The study's results aren't exactly surprising, but they highlight that visitors coming from paid search tend to be more profitable than those coming from organic search.
It's worth noting that this research was conducted for a single company in a single market, but it's a great indication that we should run paid search campaigns alongside SEO, especially since a well-optimized site will help lower click costs on ads.
To see the full material, just download the PDF report.
