Why do paid search when you rank well in organic (unpaid search)?

The organic or natural search results are the "free" listings provided by search engines. You don't pay to be in those, you are just there by grace of the search engine having determined you are relevant for a particular search term. So, why do paid search if you rank well in organic search?

In the case of the search term "Nikon D800" shown in the example above, Google is showing results relevant for an expensive new camera released a few months ago by Nikon. Believe it or not, there's a compelling case for doing well in both organic and paid search for this kind of "high commercial intent" (i.e., ready to buy) search term.

Here's the basic reasoning:

• Each time a web site is seen on the page is a chance to choose that site. In our example camera search, Amazon is listed three times on the page: once in ads (paid), once in shopping (also paid), and once in the organic results (not paid). By comparison, its nearest competitor, B&H Photo Video is only listed twice, both in paid positions and both after Amazon. Just choosing randomly, one would pick Amazon an average of three out of eleven times in this example.
• Consumers may view the organic results as a vote of confidence in the site. Research has shown that the presence of organic results with paid search results may strongly increase the likelihood of a click on the paid results. In the camera example above, Amazon is the only retailer benefitting from an organic result along with its paid result.
• Also, as illustrated in the camera example, if a site does not participate in paid search in cases where the person is highly likely to buy (generally the case in product name searches), the site risks not actually appearing in a spot where the searcher will see it. Amazon occupies the prime spot in both ads (paid) and shopping (also paid). Were Amazon in neither, the searcher's eyes would have had to make it to the bottom of the page before encountering Amazon for the first time. The same research linked above showing that organic links increase the likelihood of searchers clicking paid links also demonstrates that paid links increase the likelihood that searchers will click organic listings.
• Finally, a site has much more control over a paid listing than an organic listing leading to a host of benefits:
• The site controls the landing page the searcher goes to when they click on the site's paid link. In this product search, Amazon can use a paid link to send the searcher to a page demonstrated to be good at converting visitors to customers.
• The site precisely controls the ad copy or text shown to the searcher and can tune the ad copy to qualify searchers so that only those likely to buy will click.
• By the same token, the site precisely controls the search term where its ad or shopping result appears.

I'd like to thank Paul Clancy, Vice President of Doner Interactive Services for the initial discussion that spurred me to write this post.

Why increasing your AdWords spend doesn't always lead to more sales

Recently, I was approached by two companies that were facing stiff declines in web sales. In both cases, the companies' responses were to dramatically increase AdWords spend, sort of like of like mashing down on your car accelerator to get up to highway speed.

Unfortunately, all that happened was that both companies increased cost of sales pretty substantially without a commensurate increase in sales. One company noted a sharp increase in unqualified leads, people who would never buy their product because they did not fit the necessary medical criteria.

So, how does this happen? AdWords bills itself as a targeted marketing tool. You bid on the keywords (search terms) where you want your ads to appear, and you write the ads that will attract the people using those keywords. In theory, you should always get qualified customers.

However, in well optimized ad campaigns, you may already be reaching almost all of your addressable market as illustrated by the overlap of magenta on yellow in the diagram. Your addressable market is the people who want your product or service and are qualified to purchase it. For instance, you may be advertising a hospital within a given geographical radius and have covered all the specialities that attract its patients. In these cases, the only way to spend more on AdWords is to do things like broaden the geographic radius or write the ads more broadly, eliminating key qualifying phrases that will cause some not to click. In effect, you're broadening the reach of your ads to people who will never be your customers and paying for them to come to your site without hope of ever getting them to pay you back. This is the area shaded in green in the diagram, and it can be as large as your ad budget will allow.

So, what should companies with suddenly declining sales do? First off, avoid the knee jerk reaction of immediately spending more on advertising, and ask yourself these questions:

• Has a new competitor entered your space who is outspending you to reach the same audience with the same benefits? In this case, an increase in ad spend may be warranted, if it still allows you to make money. However, it's also worth reconsidering your landing page. Is it relevant to the keywords your bidding on and the promises in your ads? Google will show ads backed by more relevant landing pages higher than ads with less relevant landing pages, often in spite of higher bids per click for the less relevant landing page ads. New competitor entry may also be an opportunity to reconsider your messaging to point out the more distinctive features of your product.
• Has a new competitor entered offering a different value proposition? In this case, the market may be shifting away from the benefits you address. Here, increasing advertising spend by itself won't help. You need to consider messaging and product development.
• Is there some external event such as a recession that is suppressing demand? Again, purely increasing advertising spend is likely not to help. Some of that money might be better put toward couponing strategies or other approaches that address the root cause in drop in demand.

Generating better leads over the web

I'll be speaking at LA2M in a little over an hour about generating better leads over the web. The talk is targeted at small to medium sized businesses selling high involvement products. High involvement products are now always researched on the web, so the web site plays a fundamental role in your sales process. I give some ideas for how you can use your web site and search marketing techniques to improve the lead generation process.

By the way, the case study I use in the presentation is based on an interview I did a few years ago of Dave Henderson, founder of Autowatch. Dave is not a consulting client, but the questions in the interview are the type of questions you need to ask in order to develop effective web lead generation strategies.

Generating better leads over the web

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How I built Eastern's search marketing program

Eastern's search marketing program started with a happy accident. Matthew Neagle, then of Google in Ann Arbor was on our department's advisory board. Google had a program to give in-kind advertising grants to non-profits, but the non-profits were having trouble making full use of the grants. Maybe teams of students could help them better take advantage of the grants.

A couple of months after this meeting, we were offering the first version of our introductory search marketing course, now called Google AdWords and Landing Page Design. That course gives a hands-on introduction to the following concepts:

• The only effective AdWords campaign is a well-targeted AdWords campaign. 
• Getting to the point where you have well-targeted campaigns serving your organization's needs is not obvious and can easily take a couple of months of serious effort.
• Once you have effective AdWords campaigns, you need to pay attention to the experience these highly directed visitors have on your site.
• The essence of landing page design is using the information you have about your visitors to give them what they are looking for.

This last point is also difficult. It requires iterative design, testing, and refinement. There is no set it and forget it. As a result, I developed a second course, Google Analytics and Landing Page Optimization. Again, students receive a hands-on introduction to key concepts:

• Through their various marketing campaigns, organizations pay for visitors to come to their web site, and you can quantify the amount, which at times is surprisingly high.
• Achieving success on a landing page requires matching organization goals with visitor goals. In particular, it requires the organization to settle on one specific goal for the particular page. Getting an organization to this point is often again surprisingly difficult.
• The best way to gain credibility in discussing a business' goals is to quantify the discussion.
• The best way to get people to pay attention to your numbers is to use them to tell a story.
• The only sure fire way to know whether a change improves the situation is to run a simultaneous A/B test. This approach has gotten dramatically easier as tools have progressed.

Once students have taken these two courses, they have acquired the basic knowledge to become effective search marketers. However, there remains the question of how to put it all together. When should students focus more on the marketing campaign? When should students focus on fixing the landing page? When should they be tweaking both together? What are the best ways to communicate this process to stakeholders.

For this set of questions, I built the capstone course, The Search Marketing Practicum, yet another hands-on course. In this course, we guide students through the following concepts and milestones:

• Identifying online customers' decision style and their positioning in the purchase process.
• Using this information to determine whether the organization is attracting the right visitors, whether the visitors are receiving the right experience, and combinations of the two.
• Achieving Google Analytics certification.
• Achieving professional in-person and online networking presences.

Once students complete this full sequence, many have gone on to significant roles in online agencies. The general feedback I receive is that the program is unparalleled in Southeast Michigan and perhaps the United States. That said, we don't think we can sit still, and I am always receptive to feedback about how we could improve.