Effectiveness of paid search under question

Paid search has only a marginal edge in conversion rates over free search results

Paid search is only slightly more effective for advertisers than organic search, research published today has claimed.

A study by WebSideStory of business-to-consumer e-commerce sites during the first eight months of this year found that paid search had only a marginal edge in conversion rates over free search results.

Paid search involves keywords bought on a pay-per-click basis at search engines such as Google, Yahoo and MSN.

The research found that paid search had a median order conversion rate of 3.4 per cent at sample business-to-consumer e-commerce sites.

This compared to a conversion rate of 3.13 per cent for organic search results, defined as non-paid or natural search engine listings, during the same January-to-August 2006 timeframe.

The study analysed more than 57 million search engine visits. Order conversions occurred during the same session.

"For both paid and organic search, you have highly qualified traffic that converts far above the overall conversion rate of about two per cent for most e-commerce sites," said Ali Behnam, senior digital marketing consultant at WebSideStory.

"In the case of paid search, marketers have better control over the environment, including the message, the landing page and the ability to eliminate low-converting keywords."

Heather Lloyd-Martin, an author and president and chief executive of search engine optimisation firm SuccessWorks, added: "There is a strong synergy between paid and organic search. The bottom line is that marketers need to optimise both to achieve maximum results." 

With conversion rates 50 per cent or higher than overall site conversion rates, both paid and organic search remain an important acquisition source for online marketers, according to Behnam.

"However, it is important to note that these are not typical results. Our clients are steeped in web analytics best practices and understand better than most how to optimise search engine marketing campaigns and conversion rates," said Behnam.