Organic SEO or Pay-Per-Click search engine advertising, which is better? It depends on what you want at a particular moment.

Organic SEO

Organic SEO means trying to rank well naturally. In organic SEO you don’t pay for every click you get from the search engines. All the clicks from the search engines are free when you appear on the search engine result pages on the merit of the quality of your website. The only money you spend is on getting your website optimised for the search engine and getting quality content generated for your website.

Pay-Per-Click Advertising

In pay-per-click advertising you pay for every click you get from the search engines. Both Google and Yahoo! run their own pay-per-click programs. In Yahoo!, your position depends on the amount per click you are ready to pay, whereas in Google’s AdWords, your position depends on your bid amount PLUS the performance of your ad.

So which one is better?

Pay-per-click is preferable in the short-term when you want to get quality clicks immediately after launching a new website or introducing a new product. It’s not the best way of getting traffic but it is an effective way. You can start receiving quality hits as soon as you’ve activated your campaign.

Organic SEO is preferred for the long run. It doesn’t make sense to keep paying for every click especially when you talk in terms of thousands of clicks per day. For every major keyword relevant to your website you should try to appear among the top 10-15 results on the search engine result pages.

The search engine users too, trust those links more that appear naturally.

Determining budget for PPC is very subjective. It does not depend upon the industry, to your competitors’ budgets, or to other such factors. It totally depends upon how aggressively you want to market your products/services.
Just bidding high and ensuring top rankings is by no means a way to measure success of your PPC Campaign. The one factor that determines the success of your ppc campaign is your return on investment. If you are able to garner profits from your ppc campain, then by all means it is a success.
There are no specific figures for a PPC campaign budget. It totally depends upon how much you want to spend. However, there are few basic variables that need to be considered when budgeting for a PPC account-
1.  Cost per conversion: It is very helpful if you have ascertained a value for cost per conversion. This decides the upper limit of your bids.
2. Number of conversions: An estimate of the number of conversions that you expect to achieve (per month).

The ideal way to determine your budget is to run a pilot. Decide a budget, run a campaign for a month. Analyze the cost per conversions, average cpc bid for keywords etc. Depending upon this analysis, scale the campaign.

I wonder how serious Yahoo was when they re-initiated partnership talks with Microsoft… cause just hours after the official calling off of talks with Microsoft, Yahoo announced a partnership with Google to host and display Google’s Adwords ads on its search engine result pages.

Is that good? Well, for Yahoo it is. Cause Google Adwords is much more popular than Yahoo’s search marketing program. Google Adwords Ads are also more expensive per click than Yahoo ads were. This means that Yahoo may get more revenue per click than their own program was able to generate.

For advertisers, the positive is that Adwords will now be able to give them a much wider audience. On the flip side, the deal makes Google a virtual monopoly in the paid search advertising (popularly known as pay per click) arena.

Again… I think this hasn’t ended and there is more to come! Stay tuned…

In line with my expectations (ref. to my blog post on May 4th 2008 – Microsoft walks away from Yahoo deal) that walking away from the deal was just a temporary ploy adopted by Microsoft, major news papers have today reported that Yahoo and Microsoft have resumed talks in the wake of a shareholder rebellion launched by billionaire investor Carl Icahn.

However, this time the discussions are focusing on a deal short of outright acquisition. Microsoft announced the discussions in a brief statement that it made on Sunday.

The press reported that Microsoft was proposing an arrangement focused only on Yahoo’s search advertising business.

Makes sense doesn’t it? They need to compete with Google and its Adwords program and Microsoft’s Adcenter isn’t really doing too well.

Well, I guess it promises to be a long, exciting and complicated battle, but I still week Microsoft may get Yahoo in the end.

With Microsoft announcing that it no longer wishes to persue the acquisition of Yahoo, what promised to be the year’s most talked about blockbuster deal may have ended in a little more than a whimper. But… has it really ended or is it a ploy by Microsoft to wait till the Yahoo stock plunges and then rebid at a lower price?

If major newswires are to be believed, at Yahoo, Jerry Yang is most likely to face several angry share holders who believed that he should have accepted Microsoft’s offer. On his part, Jerry Yang has been quoted as saying, “with the distraction of Microsoft’s unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history”. I wonder what that transition is?

From a paid search advertising perspective one only hopes that they improve their own offering instead of selling out to Google’s Adwords program. If they do decide to tie up with Google, then Google Adwords will have a virtual monopoly in the paid search advertising space and that would be quite sad.

Whatever it is that ultimately happens… the future promises to be interesting!!!

Users using the Yahoo search engine would have noticed google ads showing up on their search engine result pages. While this has just been a test so far, rumours have it that the test has been a success and Yahoo is considering a more extensive deal with Google.

What does this mean to Google, Yahoo & paid search advertisers?

It means that the Yahoo search marketing program may take a back seat to Adwords. It will also mean that Microsoft may have to pay a little more for Yahoo considering the fact that the Yahoo balance sheet may look better with part of the Adwords revenue than it would have with the Yahoo search marketing ad.

Google has made the next logical move after pay per click and pay per call. They have now introduced pay per action. This means that you pay not when someone clicks on your ad but when someone actually completes an action defined by the advertiser. Advertisers can choose to pay when a user makes a purchase, signs up for a newsletter, or completes any other clearly defined action that they choose.

This is very similar to the affiliate marketing model, where the merchant pays a publisher only when a defined action takes place.

As always Google has gone a step further to ensure that the cost per action is automatically worked out by their system. They’ve said that advertisers should have received more than 500 conversions through CPC or CPM campaigns in prior 30 days to be eligible to participate in this pay per action program. This means that they have enough data to calculate the best performing keywords, campaigns and cost per conversion that you’re incurring.

I may be wrong, I guess there may not be a huge change in the cost incurred by an advertiser if he chooses either pay per click or pay per action, all other factors remaining equal.

Yahoo announced the rollout of a new feature that they call quality-based pricing. They claim that this is an ongoing effort to raise the value of their sponsored search and content match products.

So far all traffic for a particular keyword was billed at a certain amount. Now, with the introduction of Quality based pricing the cost per click will differ based on the quality of the websites that are providing traffic to you.

Yahoo claims that “Quality” is calculated based on conversion rates and other measurements of the ability to deliver more interested and valuable customers to you from particular distribution partner sites and discounts will be automatically applied to your account.

They also claim that cost per click should decrease. Its too early to conclude if that is going to happen… Lets wait and watch!

We’ve all heard that ranking in the natural results of search engines is much better than using their paid search marketing programs. It is definitely cheaper in the long run (if the organic search engine optimization is done correctly, that is) but there are occasions when a well executed PPC campaign can offer more value than organic SEO (search engine optimization).

Some instances that I can think of are -

1 - Lead generation for an upcoming event -
Organic SEO takes time to show results. You’re never going to get too much traffic if the event is in the very near future.

2 - When targeting specific niche fields -
Going in for a PPC campaign can offer you better value for money if you’re in a niche field and there is not too much competition. Off course, this will be subject to bid inflation as more n more players jump on to the bandwagon.

3 - Testing different site layouts/ product categories -
If you’re not sure if your site layout is conversion friendly or you have a new product category that you’re not sure of? Run a PPC campaign and check for conversions before investing in a full fledged SEO campaign.

These are a few situations where I would recommend a PPC campaign over an SEO campaign. Feel free to add to these situations or share your views.

Vishal.

I, often come across question regarding search marketing in India. The most common question is “how many searches are carried out in India” and “To what extent could I, as an Indian company targeting the domestic market, leverage search marketing to help me increase my bottom line”.

Today, on 7th December 2006, there was an article in The Financial Express that gives a few India-centric figures.

They say that there are 40,000 advertisers targeting Indian we users, who conduct over 1 billion searches a month. Out of this, over 300 million searches carry ads, eventually resulting in 5 million click-through’s every month.

IAMAI estimates 37 million internet users in India and a majority of them search online, making them perfect targets for search marketing.

So I guess, paid search marketing has finally come of age in India.