Thursday Jul 19, 2012 by Larry Kim - Founder and CTO, WordStream
If you use Google search (and who doesn’t), you may have noticed that sponsored results (pay-per-click, or PPC, ads) have been taking over more and more of the search engine results page.
Here at WordStream, we’ve noticed that too! So we decided to do some research into what impact all of these new, bigger, more prominent and engaging ad formats are having on the average Google searcher. The results are astonishing:
Clicks on paid search listings beat out organic clicks by nearly a 2:1 margin for keywords with high commercial intent in the US.
Now, to be clear here, organic searches still get more clicks overall than paid search – but not all keyword searches are created equal. Keyword searches with high commercial intent – meaning, keywords where a searcher is looking to buy a product or service (for example: “buy stainless steel dishwasher”) – are worth far more to businesses than your basic informational keyword searches (for example: “who is Thomas Edison”). Our research found that for these valuable, high commercial intent keyword searches, paid search advertising listings gave the “free” organic search listings a resounding beat-down. Naturally, we’ve illustrated the results in an infographic. Click the image to see the full-size infographic:
Much to the delight of internet marketers, new, bigger, more engaging and more targeted sponsored ad formats – which allow businesses to target prospective clients in more precise and relevant ways – are behind the increases in CTR for high commercial intent keyword searches. These new ad formats include:
Couple these and other exciting new ad innovations with the fact that approximately half of searchers still can’t differentiate between paid and organic search listings, and you can quickly see what’s happening here.
While these innovative new paid search advertisement options are rapidly growing in size and power, Google is simultaneously waging all-out war on SEO web spam. Over the past few months we’ve seen significant updates that make it harder to rank in organic search, including:
The net result is that organic search has become significantly harder and more costly to execute, nearly impossible to measure, and yields increasingly unpredictable ROI.
It’s too early to declare a victory for either side. The one thing that is clear from our research is that the board is set and the pieces are in motion. What do you think of the shifting battlegrounds here? Let me know what you think in the comment fields below.
A special thank you to my colleagues, Miranda Miller (Search Engine Watch), Aaron Wall (SEO Book), Tom Demers (Measured SEM), AJ Kohn (Blind Five Year Old), and Elisa Gabbert (WordStream), all of whom provided incredibly valuable input and commentary into the design and data of this research study.
Our survey was limited to advertisers in the US, for Google Search only. In our survey, we define high commercial intent keywords specifically as keyword searches on Google that have significant advertiser competition and trigger a Google Shopping or Google Product Listing ad.
We used recent average click-through rate data collected through our AdWords Performance Grader across over one thousand AdWords accounts in the last 60 days. We also looked at the Google Analytics/Webmaster Tools and AdWords account data of WordStream’s managed accounts to analyze organic click-through rate data and trends.
Because people often click on multiple ads and/or organic search listings from a single search result page (which makes the click-through rates of all of the paid and organic listings add up to more than 100%), we normalized the CTR data to reflect the % share of traffic generated for each paid and organic search listing present on a typical search engine results page.
Larry Kim is the Founder & CTO of WordStream in Boston, MA. You can find this post, as well as additional content on WordStream's blog located here. You can also follow Larry on Twitter (@larrykim) by clicking here.