IMV10 : Paid vs. Organic Search Strategies

The following is a transcript for IMV10 : Paid vs. Organic Search Strategies. The original podcast is located here.

Announcer:

Welcome to the Internet Marketing Voodoo podcast brought to you by MindComet. And now, here's your host, Ted Murphy.

Ted Murphy:

Welcome to Internet Marketing Voodoo episode 10. I am your host, Ted Murphy and with us today is David Berkowitz. David is director of strategic planning for 360i and a columnist for MediaPost’s Search Insider. Welcome to the show today, David.

David Berkowitz:

Thanks a lot. It is a pleasure to be here.

Ted Murphy:

Well David, we are here today to talk about paid versus organic search strategy. And I know that people are not talking enough about search engines these days, so I wanted to make sure that somebody was talking about that.

David Berkowitz:

It is about time.

Ted Murphy:

So search engine marketing is obviously one of the hottest topics in Internet marketing right now. Give us a brief description of search engine marketing in general and the difference between paid search and organic search and basically a high level picture of the industry.

David Berkowitz:

Sure thing. Well, search engine marketing is simply the way that marketers reach out to their target audience through the search engines. And the main two ways that they are able to do this is one is through paid search, which is buying those little key word ads that run above and along side the main body of listings on Google and Yahoo and the main engines and so they will appear as sponsored to links or something of the sort depending on the engine and so these are pure advertising and they are sold on a pay per click basis. And it is a fit in model; we will get into that a bit later.

But then the other main way that marketers reach out to their customers is through organic search, also called natural or algorithmic search and so it is simply a way of making any of their content on the web as accessible as possible for search engines so that their Web sites appear ideally toward the top of the natural listings, the main body of results that you see.

Ted Murphy:

David, do you think that organic search is still viable? Is it still alive or has it just been saturated with so much SEO efforts that it is not really relevant any more?

David Berkowitz:

You know, I think that SEO, it can get a bad name you know, because of some of the commercial aspects of it. SEO is search engine optimization, but I think overall it is really comes out on the plus side for the consumer. Because, what happens is if you are looking for someone to send flowers on Mother’s Day or you are looking for a place to buy a digital camera, odds are you are actually going to be pretty comfortable with a name brand being there. And to the point to where if you don't see some of the name brands that you are familiar with the consumer might even get to thinking that the search engine is a little off.

Like, how come these guys aren't there and so they don't want to see some mom and pop from Milwaukee or something for these main generic results and so I think a lot of it is these marketers who are reaching out to their target audience and finding an effective way to do it and doing their customers a service.

Ted Murphy:

How should a marketer determine whether they should use paid search versus organic search and what are the costs and efforts that are associated with both of those types of marketing?

David Berkowitz:

They are definitely two different types of models, although, quite a few marketers use both and usually consideration at the very least to be using both. With paid search a simpler model to understand, because it is pretty much just advertising when it comes down to it, when doing a paid search campaign what is really important is to know how much a customer is worth to you. And, this is where you are going to be bidding for every click that you get so it might be as little as 10 cents a click for a fairly obscure search term that not a lot of people enter in. Or, it could even get to $100 a click for, oddly enough, one of the most talked about key words at search engine marketer parties is “mesothelioma.”

Ted Murphy:

Oh yeah, cancer.

David Berkowitz:

Yeah, from asbestos. And it is so wacky, you know, who knew among general marketers what this word meant? Well, thanks to search marketers they love talking about this because they always bid it up through the roof until there is that ceiling generally of like $100. Why is it bid that high? Because when people are searching for it they usually are in the market for a good lawyer or could use one.

Ted Murphy:

Yep.

David Berkowitz:

These people are worth quite a bit, every lead. You know, they can't pay enough. I was just, for instance, reading the other day that the cost for a wireless customer is for, wireless cell phones, on average $125. They have a good sense of what these leads are worth and ultimately that is the clutch of it without getting off on to many tangents here. You want to bid accordingly so that you are still turning a profit once you factor in how well your customers are converting on your site.

Ted Murphy:

And what do you think about the main search engines the Yahoo's, the Google's, the MSN's versus some of the smaller engines that also have paid programs. Do you recommend that people have a diversified strategy, or, that the real big payout is coming from Google because you are looking at 60% of the traffic there?

David Berkowitz:

Yeah, well, the biggest benefit those main engines provide is the distribution. If you are doing a significant campaign at all you need to factor in the major engines, where most people are searching. That being said, it does help to balance out the campaign across other engines. There are several benefits. They can provide, first of all, they can help with incremental traffic. You know, if you really want to cover every base.

They can also be great for smaller scale campaigns. Maybe you know you have a small budget you are experimenting with, what, also a benefit is that since these other engines, these smaller engines wont have as many advertisers the bidding wont be as fierce and you can get more of a deal that way.

Ted Murphy:

I guess you also have to measure that against the additional time of managing all these small search engines that may give you an extra 5% boost on the amount of people coming to your Web site.

David Berkowitz:

Well that is definitely something that can't be over looked in terms of the time required to do this, and so, one of those hidden costs with paid search is that it is just so easy to do because it is very populist to take on advertising. Anyone can go to Google or Yahoo and in a few minutes set up a marketing campaign. It is crazy, right?

Ted Murphy:

Yep.

David Berkowitz:

To think what it would take, you know, back in the olden days, a few years ago. And so everyone can do it. But the problem is, not everyone can do it well and effectively and just to really get a sense on if they are really getting a return on investment. You know, they might just pick a number that sounds nice and try to get in the top position on the sponsored links and say, okay, this feels right, or you know, this is costing me a lot of money. And it is still amazing how underutilized the analytics are when it comes to search marketing.

Ted Murphy:

Yeah, I know that I have dealt with a couple CEO’s personally that have just said we want to be number one, we don’t care what it costs. And you know, you look at that and you go, well, it is $30 a click or $50 a click to be number one, you are only selling a product that is $10. I don’t know if that is really going to work out for you. Yeah, you are going to be on top, but I don’t see how the economics work there.

David Berkowitz:

Oh yeah, yeah, it is very easy to lose sight of that.

Ted Murphy:

So what are the actual costs that are associated with a paid search campaign and also, I don’t want to focus too much time on search, let’s talk a little bit about organic and what are some of the benefits are there.

David Berkowitz:

With paid search it is the bidding themselves. There is the creation of the landing pages, where those ads actually link to, so most of the time it helps to have someone that is targeted as close as possible to the key word and then just continue that experience for the consumer. If they are looking for a digital camera you don't want to take them to some electronics store home page where the consumer is like wait, I thought I was going to get info on cameras.

And then the time in managing this and it can be overwhelming just because of the level of control you have over it. Branching off from the control theme, I think, is a good way to get into search engine optimization because you can't say I want to be number one on Google and get there for search optimization.

Ted Murphy:

You can, but you are not going, in most cases you are not going to be—

David Berkowitz:

Okay, you can say what ever you want, that is true. You can definitely say number one or bust, or, and you do have some people saying that. It is always nice. It is a little more challenging because especially for well, just about anything you could think about searching for there is a lot of competition for being in the first few links. If you are not in the first three pages of the natural search results you are essentially invisible.

And if you are not on the first page you lose a lot of that visibility there. Although, more people than I expect actually do click through to the second and even the third page. But you need to be it so that mean on average you are talking about 30 positions for any given search and especially for some of these broad searches then there is a lot of competition.

Ted Murphy:

Let's talk a little bit about what it takes to put together an organic campaign.

David Berkowitz:

In its most simple form there are two things that you need to pay attention too when it comes to organic search. One is the technology side of it and the other is the content. Now what technological and technical fixes, then its really what is all the coding behind the Web site itself and how can you make a Web site or web page most readable to the search engine. And so, this you get into some of the optimization 101 aspects like meta tags and title tags and just some of those details that search engines will look for to get a basic Web site is about.

You also get into Web site design because the search engines, they send out these spiders. It is all, I love the terminology here, like a horror movie. So they are sending out these spiders to crawl your sites and it came from the search engine and so you have these spiders going around and crawling and reading everything. And then bringing this back to home base and then organizing everything, these spiders are going from link to link and trying to cover as much of the web as they possibly can. And you just want to make sure that your door is wide open so that they can find you.

The other side of it is the content of the web pages themselves, so, if you are a travel site, for instance. You build out a lot of content about the destinations that are really popular for your customers. And so that way, when people are searching for, like, Caribbean vacations and all that then they might find your web page on hot spots to go in the Caribbean. And so it expands the idea of what your Web site is for. It is not just for the hard sale, but also to provide information. And actually it is a pretty benevolent view of the Web in that regard because it is training the marketer to be a resource for the customer.

Ted Murphy:

How big of an impact does back linking play in organic search and linking in general?

David Berkowitz:

Well linking is still a very important part of a search. There is the quantity of links which isn’t even quite as important as the quality of them, but the engines and especially Google, this is one of the major achievements of Google is to essentially weight how valuable a link is going to another Web site. And that is still apart of Google’s so called “secret sauce.” You know, how they determine how a page is ranked. By all means linking strategy is part of optimization and it is also one of the reason why, and Google especially, although you will find this in any engine, blogs happen to rank pretty well for a good number of searches.

Part of it is they have a lot of fresh content. They are routinely updated and search engines like that. They know it is not some stale site they are going to. But part of it is also that blogs are so heavily linked to each other. They just build these really natural communities. And they do it really without trying. You know, this is just because it is their nature.

Ted Murphy:

It is very organic and the search engines like that as well.

David Berkowitz:

Yeah, exactly.

Ted Murphy:

All the linking doesn't happen over night.

David Berkowitz:

And it is for a purpose and people are linking to other sites that they recommend and there is articles that they think are worth reading and other blog postings that are causing a stir. And so why marketers can do pretty well, even if they don't have a blog themselves to think like a blogger in that regard.

Ted Murphy:

Absolutely. So, how do I ultimately measure the return on investment or whether it be organic or for paid search? What are the common practices that you are seeing?

David Berkowitz:

There is a bunch of ways to do it. One is just to make sure you are measuring where your traffic is coming from so you can get a sense of how much traffic is coming from each engine. And how that changes over time and maps that with the conversion rates that you are getting and whether or not you are looking at leads or sales or clicks on your site, because the main thing that you are making revenue on is the advertisements so you just want really good visibility there.

Then there are a lot of ways that you can measure the return on investment. How do you measure the return of the investment of the Web site itself and then factoring in the search engines role in bringing people there?

Ted Murphy:

And what type of time and effort it is taking you to put together that program.

David Berkowitz:

Yeah, and that is definitely a piece of it. There is some up front work especially that applies, but there is, you know, the search engines they are always tweaking their algorithms. And so if you perform the same search everyday for a week on the same engine you still might see those results shuffle a little bit day to day and month to month. It can be more significant and it is an ongoing process.

Ted Murphy:

Yeah, actually I know that Google is getting ready to go through another big update with Big Daddy. It is interesting to see the changes in the search results that are happening with Big Daddy. Actually, I don’t know if you have been to this Web site, it is http://www.cached.it/english/bigdaddy-dance.php and that actually allows you to check the rankings for Big Daddy and someone just built a little interface there. So pretty interesting if people want to go out there and check what their potential new rankings are going to be it is a great little tool.

So David, I have a question from one of our listeners here.

Denise Williams:

Hi Ted, this is Denise Williams. I am calling from Seattle, Washington. I had a quick question for Internet Marketing Voodoo. I work as a small business marketer for a local automotive dealer and our Web site doesn't rank well with search engines and it is often pages below other major competitors. Now, do I have to resort to paid search or is there any other way to improve our ranking since I am working with such a limited budget?

David Berkowitz:

Paid search isn't our only option and by all means most traffic still comes from natural search. I would say the most commonly said figure is that 70% of traffic comes from natural search and 30% comes from paid search. And it varies considerably, you know, for an automotive dealer you might actually see an even higher percentage coming from paid search because it is very much a commercial search that would bring up results.

Essentially there are a couple things you can do, and it depends on the Web site itself. You wonder why her site isn't ranking as well as it could and perhaps it is just very tricky for those search spiders that we talked about to find their way through it. I mean, it is possible her competitors are also extremely aggressive on the optimization front. I would be curious to see what they are doing and who they are.

Paid search can be extremely valuable because she has got to have a pretty decent sense of what a lead is worth to her so if she can design her site so that it is really effective at capturing these leads then paid search can also be a great way to go. And one of the bonuses of the market that she is working in here is it sounds like she is in more of a niche, key word, term area here.

Ted Murphy:

Like a local market.

David Berkowitz:

Exactly. So considering this local market and these are very specific searches, you know, most searches are still one or two key words. To find her it is not like they are just going to be entering a name of a major car brand. They are going to be looking for something specific and probably even on the buying end of it. Okay that they actually want to go and purchase a car or take a test drive.

Ted Murphy:

Yeah, so if she is in Seattle, they may be typing in Seattle plus the name of whatever auto make it is.

David Berkowitz:

And then even on top of that "test drive" or "purchase" or whatever it is that the consumer is looking to do that that point that would bring up a dealer, as opposed to say an automotive information site. And so, she is really getting into what is called the long tail of search. Massive searches that might get only a handful of searches, but are extremely well targeted. Because of that, and then the key word prices are likely to be a lot lower for terms that are most relevant to her than some of those generic car brand names and that sort of thing.

Ted Murphy:

David, what would you say are the top three things that we should know about paid search versus organic search?

David Berkowitz:

Number one is that they play off each other pretty well. Some of the most value actually does come from doing both. Because there is something about the consumer being exposed to the brand on both sides of it that often leads to a result that is greater than the sum of its parts.

Another top thing to know is that the time involved is significant. And that is a factor that you really do need to consider in terms of the cost of the campaign and the third thing, worth knowing is that this market still has a lot of room for new entrance and that it is not like whoever is at the top now is going to be at the top tomorrow and it is not like the key word prices are so high that it is not even worth bidding on. If you have got some good matrix in place for what you are looking for and if you are ready to build up some effective content and you really have strong strategy for how search integrates with your overall marketing campaign then we are just getting warmed up as far as search marketing goes. Really, it is only a few years old that it has become a mainstream marketing vehicle, and it has become a mainstream marketing vehicle because most marketers find it effective and I think we’re just starting to get a sense of how effective it is.

Ted Murphy:

I appreciate it, David. If you have any questions for Internet Marketing Voodoo you can call us toll free at 866-206-4461 or email me at ted.voodoo@mindcomet.com. Also be sure to check out David’s articles and columns in the Search Insider from MediaPost.

David, I appreciate you being on the show today. I hope we can have you on again in the future.

David Berkowitz:

Thanks again, Ted. I would love to be back.

Announcer:

For more information on this week's topic, visit http://www.InternetMarketingVoodoo.com. This podcast has been brought to you by MindComet, the Relationship Agency.

[End of Audio]

Marketing Resources
Download Top Ten Things to Know About Search Engine Marketing (PDF - 677.9KB)

Listen to the Paid vs. Organic Search podcast.

Contact MindComet about integrating SEM strategies into your marketing mix.

Check out your site rankings with Google's Bigdaddy Search Engine Update.

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