Study claims PPC brings more buyers than SEO — What’s Missing?

A recent study by PPC management firm EngineReady presents alot of great data for retailers to consider regarding order sizes, conversions & other purchase metrics important to eCommerce.  The study was summarized by InternetRetailer, which can be found here.

The problem with this study, as many studies & surveys in the online marketing industry, is that it is SKEWED to the target audience.  Below are some reasons why the study is wrong in its claim that PPC is more likely to bring buyers than SEO.

Key findings from the study included:

• The conversion rate from paid search is 2.03% versus 1.26% from organic search, according to the study, which is based on traffic to 26 e-retail sites in the 12-month period that ended June 30.
• Paid search visitors bought the most, with an average order value of $117.06 versus $109.27 for those coming from other sites, $106.64 for visitors from organic search and $95.29 from direct referrals, such as from a bookmark or direct entry of a URL.

The known trends (SEO vs PPC) from many other industry studies that have been overlooked in this study, thus skewing the claim that PPC can bring more buyers, include:

• MORE visitors are reached through SEO as consumers are significantly more likely to click on organic listings over PPC listings (recent Hubspot researched showed 75% of clicks are to SEO listings, 25% to PPC ads)
• Due to the sheer volume of traffic delivered through organic search, odds are the conversion rate will decrease.  SEO delivers the masses (3-4X reach of PPC) — so conversion rates logically would be somewhat less.
• PPC will have a higher conversion rate due to the sophistication of landing pages purely for PPC.  As a holistic strategy, SEO can’t really operate with depth of landing page refinement that PPC can.
• In aggregate, SEO typically has higher ROI due to rising PPC costs and the fact that SEO clicks are “free”.  Granted, you do pay a retainer fee for SEO services to get you & keep you ranked.  (SEOMoz study found that 88% of budgets go to PPC, while 12% go to SEO). Net-net, what’s the better ROI?
• PPC is the equivalent of renting a house.  SEO is like owning a house.  The investments in SEO have significantly stronger long-term benefit than PPC.

At the end of the day, PPC has tremendous value for advertisers, and is a powerful mechanism when combined with successful SEO.  The study discussed here does have useful findings, but it’s missing important data for eCommerce decision makers.  When one looks at the complete reach of SEO, cost-analysis and long-term value —- the benefits of a well run SEO campaign outperform PPC and in sum, bring more buyers.

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