Is PPC Optional Any Longer?

by Adam Kreitman

The assumption by experts (myself included) and laypeople alike is that when it comes to getting the most clicks on Google, the organic results is where most of the action is.

However, new research by Wordstream provides some interesting stats that cast some doubt on that assumption.

Here are the stats…

64.6% of clicks for high commercial intent keywords are from Google ads vs. 35.4% from organic results.

The top organic listing gets just 8.9% of the clicks, the top 3 ads on the page get 41.1% of the clicks.

45.5% of people couldn’t identify the search engine results page if there wasn’t a right column.

Wordstream is a very well respected firm though, to be fair, is very much focused on the PPC side of the equation. So, as with any research, you have to take the source into account.

There’s also some additional data that would be nice to see here such as the conversion rates of PPC traffic vs. organic traffic as well as getting some breakdowns by industry/niche.

That said, those are some pretty big numbers in favor of PPC being the place where most of the action is these days for “high commercial intent” keywords.

However accurate the data is or isn’t, there are two big things going on here that you need to factor into your online marketing strategy.

First is that Google, quite purposely, is shifting the focus of the search engine results to paid search and Google AdWords. Take a look at this screen shot I took for a search for local plumbers in St Louis. The areas is the red boxes are paid search.

Notice how, above the fold, only 4 local search results show up. And this is using a pretty good size monitor. People on laptops and iPads are going to see even fewer of the local or organic results.

Here’s another screen capture from a product search for the Canon Rebel t3i.

Again, look how much of the above the fold space is taken up by paid ads. Google recently transitioned Product Search to all paid results so if you sell products online, you pretty much have to use paid ads if you want to show up on page 1.

The second factor to keep in mind is something I’m constantly harping on (and will continue to do so!)…diversity.

Relying on just SEO, just PPC, just Facebook, etc. is a recipe for disaster.

It always has been (just ask those that have had an AdWords account banned or got slapped by the Panda or Penguin organic algorithm updates) and is only becoming more so.

If the data from Wordstream’s research is accurate, then paid search results are now getting about twice as many clicks as organic search results for high commercial intent keywords. Based on the screen shots above and seeing how the paid search dominates the above the fold results, it certainly seems like those numbers are quite plausible.

If you’ve been ignoring Google AdWords, I hope this research will encourage you to consider adding AdWords to the marketing mix for your business. Because these days, if you want to stake your claim to a spot on page 1 of Google, AdWords may be your best, if not only, option.

Victor July 26, 2012 at 6:18 pm

Hi Adam,

Thanks for featuring our study on your blog! You’re spot on about being wary about studies published by companies that directly benefit from the study – yet we’re respected in the field for the very same controversial studies we publish (even if we pepper it with cute Pandas and Penguins in the background).

We’re currently working on breaking down our data by industry/niche, so keep posted!

(PS – My name links to the study we’re talking about)

Adam Kreitman July 26, 2012 at 7:05 pm

Thanks for stopping by Victor. Looking forward to seeing the breakdown by industry/niche along with cute Pandas and Penguins in the background!

Adam

Russ Henneberry July 30, 2012 at 7:07 pm

I wonder how much of what Google is doing with PPC is because of declining CPC revenue for a third quarter in a row (source: http://www.theatlanticwire.com/technology/2012/07/decline-google-and-internets-ad-business/54835/ )

Or is it because they are finding that a PPC dominant SERP creates a better user experience for the searcher. I

If it’s the former, they run the risk of alienating their real product — the millions of searchers that visit trusty Google every day.

Adam Kreitman July 30, 2012 at 7:28 pm

Hi Russ-

With revenue from AdWords driving 96% of their revenue (at least it did last year) Google clearly has a vested interest in getting as many people clicking on AdWords ads as possible. And they’re clearly doing a good job. In that article you referenced, it notes that while the actually CPCs (costs per click) have dropped 16%, they’ve managed to increase overall clicks by 42%. And, according to the latest numbers, they are holding on to their 60%+ share of the search market so, at least so far, they don’t seem to be alienating searchers. We’ll see if that trend continues!

Adam

Russ Henneberry July 30, 2012 at 7:32 pm

I guess the question is — if 14% of the “above the fold” pixels are displaying organic results on commercial queries, is that less than it was a year ago? 3 years ago?

In other words, are they creating more CPC dominant pages than before and, if so, why? And, is it negatively affecting the searcher’s user experience.

Adam Kreitman July 31, 2012 at 4:14 am

Hi Russ-

That’s a good question. I don’t know what the percentages are. However, it does depend on the type of search. For example, if you’re searching for a product, the product search results (which often appeared above the fold on my monitor) used to be free. However, Google recently announced that those will all be paid results now. (BIG deal for those selling physical products, by the way.) That’s definitely leading to more PPC dominated pages.

For local searches, there used to be more AdWords ads above the fold, but when Google added the map for Local Search results, that bumped a number of the AdWords ads down the side of the page. The percentage of ads above the fold has dropped in this case compared to 3 years ago.

As far as it affecting user experience, as long as the ads take searchers to quality information that help them find what they’re looking for, Google should be fine. And since their algorithm for AdWords rewards the most relevant ads, I believe users are finding what they’re looking for when clicking on the ads. Actually, with the erratic nature of the organic rankings, I’d argue that there are plenty of searches (with commercial intent) where users will more quickly find what they’re looking for by going to the AdWords ads vs. the organic search results.

Adam

Russ Henneberry July 31, 2012 at 1:22 pm

Awesome stuff. Thanks for your response Adam!

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