Marketing Sherpa has issued the results of a new study of Internet marketing. Their Internet Marketing Benchmark Guide is summarized in their online excerpt. Some key findings:

• “The big marketing debate over SEO has never been whether or not to do it. It’s self-evident that you’d want your site to appear near the top of free rankings for keywords important to your brand. Instead, the debate has always been whether to outsource or handle SEO in-house.”
• “In short, if you hire an expert for SEO, you tend to get significantly better results.”
• 28% of large firms were not adequately optimized for keywords central to their business. “The lesson? No matter how famous your brand, you may be able to get better rankings and traffic (not to mention brand perception among prospects) if you test outsourcing SEO to an expert.”
• Experienced search marketers are focusing doing the best possible job with the most important keywords for their brands – better to do an extremely good job of “optimization with fewer search terms than doing a slightly more slapdash job with more terms.”
• They asked 3,053 marketers to rank the top two marketing tactics in terms of return on investment (ROI). The results are in the chart above.

According to InformationWeek, paid search (sponsored links or pay per click (PPC) ads are not much better at turning shoppers to buyers. Contrary to some other recent research showing a higher conversion rate of visitors to buyers for organic search, this report seems to indicate the reverse, although not by much.

“Keywords bought on a pay-per-click basis at search engines such as Google, Yahoo and Microsoft MSN had a median conversion rate of 3.4 percent, compared with 3.13 percent for unpaid results to search queries [...] Both forms of search were far above the overall conversion rate of about 2 percent for most e-commerce sites. [...]

Most people don’t understand that to get high conversion rates you need multiple touch points. It’s not just one or the other.”

MarketingSherpa did a study of conversion rates. Conversion Rate is the proportion of web sites visitors who order a product on an e-commerce site or complete some other desired action on other sites, such as filling out an inquiry form. Comparing organic search (SEO campaigns) against paid search (PPC campaigns), they found the following:

• SEO had higher overall conversion rates than paid search (4.2% versus 3.6%)
• For e-commerce purchase campaigns, SEO had higher conversion rates (4.1%) than paid search (3.8%)
• Looking at delayed e-commerce/service purchase campaigns, SEO also had higher conversion rates (6.3%) than PPC (4.2%)

In a related study by WebSideStory covering the October-December holiday buying season in 2005, the overall search engine conversion rate for business to consumer (B2C) web sites was 2.3%. That was more than twice the conversion rates of banner ads, affiliate marketing links, shopping search engines and other referring links (0.96%).

Industry research shows that most e-commerce sites are not well optimized for organic search engine rankings. A 2005 study by OneupWeb revealed that 83% of Internet Retailer Magazine’s top 100 websites fail to use basic search engine optimization principles to gain high rankings.

The study went on to show that of the well-optimized web sites, 89% were found on the first three pages of the search engine results for their respective keyword queries, and 52% appeared on the first page.

By contrast, only 4% of the non-optimized pages did as well. The implication is pretty clear.

According to the results of the iProspect Outsourced SEO Metrics & ROI Study, 35% of the surveyed organizations that promote their web sites with natural search engine optimization (SEO) and pay per click advertising recognize a higher return from SEO.

This compares to just 11% of marketers who report that PPC ads produce higher ROI. That means that three times as many webmasters who can measure the ROI of each method recognize a higher ROI from natural SEO than from PPC advertising.

Just another reason Rank Magic focuses on natural search engine rankings.