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Organic Results Increase Paid Search Clicks

pay per click (PPC) ads and organic SEO

We’ve often told clients that showing up in both the organic listings and the sponsored (pay per click, or PPC) listings “super-validates” your site as one to be clicked. Now, a study from a couple of NYU Stern professors has confirmed that organic search engine results can play a direct role in whether or not a paid listing is clicked. In essence, they’re saying that if your business has both a paid result and an organic result appear at the same time, you have a better chance of your paid result getting clicked than if the organic result had not appeared. Presumably, the reverse is also true: that your PPC listing increases the odds of your organic listing being clicked.

Professors Anindya Ghose and Sha Yang have highlighted the following findings:

  • On average, the impact of organic listings on paid advertising is 3.5 times stronger than vice-versa, possibly because of the tendency of consumers to trust organic listings more than paid ads.
  • The positive association between paid and organic listings increases advertisers’ profits by at least 6.15% when compared to profits in the absence of either of them. The positive association is strongest when advertiser-specific keywords are used and weakest when brand-specific and generic keywords are used.
  • Click-through rates, conversion rates and total revenues are higher when both paid and organic listings are present simultaneously than when paid search ads are absent.
  • The combined click-through rates are 5.1% higher when paid and organic listings are present simultaneously than when only the organic listings are present.
  • The combined conversion rate increases 11.7% when paid and organic listings are present simultaneously than when organic listings alone are present.

The professors used “a unique panel dataset of consumer responses to keyword ads on Google” to conduct their research. The complete findings from the study are available in a paper entitled “Analyzing the Relationship between Organic and Sponsored Search Advertising: Positive, Negative or Zero Interdependence?” It’s 52 pages long and a bit academic.

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