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SEO vs PPC Website Statistics Confuse the New York Times

Anyone who does web analytics knows how easy it is to make a mistake. So it is not surprising that the New York Times published an article which can be misleading.

The NYT headline is “The Payoff of Ads on Search Engines” and reports on a study by Engine Ready that “visitors who get to retail sites through sponsored links are more likely to buy than those who click on organic results.”

Unfortunately this really doesn’t mean anything. There are many reasons for this:

  • We are not comparing the same keywords
  • A search ad keyword can represent a whole family of keywords
  • A search ad keyword can be manipulated so that the ad will not show if an undesirable keyword is used with it

In order to have meaningful conclusions we have to analyze the same exact match keyword with the same positions. That way we will know if PPC is beating out the organic results. Actually, this may be interesting information but it really won’t answer the question of where should we be investing our resources.

SEO vs. PPC: What Should Companies Invest in?

In order to answer that question we should compare the ROI of PPC vs. SEO. The revenues of PPC vs. the cost of ads and managing the campaign vs. the cost of running a SEO campaign. Even this is more complicated than it looks as not everyone buys something on the 1st visit.

  • A buyer could 1st come to the site through PPC and then come through SEO on the buying visit. So you have to decide which channel gets what credit
  • Or the same person can buy the first time when he comes to the site through Adwords and then buys again a month later when coming through the organic results

Organic results can be better than search engine

You should probably be using both SEO and sponsored search channels but you do need to decide how to divide your budget. Most companies under invest in SEO and SMO because it is more challenging and harder to predict results.

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