Paid search under scrutiny

By By Wenlei Ma | 10 August 2012

Law firm Slater & Gordon has questioned the value of paid search, opting instead to focus on organic search. However, search experts still believe a combination of both is best practice.

Slater & Gordon’s general manager of marketing and business development Kalle Amanatides told AdNews: “We don’t disregard paid search at all but organic generally does get a better response. When you are well optimised in organic search listings, you don’t need paid search ads. With paid search, people know it’s advertising.”

Amanatides said the law firm has invested a lot of time and energy in optimising search terms which led to very strong results. She added that Slater & Gordon does supplement with paid search but it was not using paid online activities for the brand’s current ‘Not A Problem’ campaign.

While it seems Slater & Gordon’s stance might threaten Google’s dominant position, industry experts agree a combination of paid and organic search strategies is necessary for most brands.

DGM head of search Cem Bali said: “The immediacy of paid search is something hard to equal just through organic search. The messaging you can get through paid search is almost instant.”

Bali said it was important to ensure each brand’s paid search investment is performing, which can be tested by turning off paid and seeing if organic is plugging the gap created.

Google studies have shown pausing paid search will lead to a ARdecline of clicks through to a website. A 2011 paper from the internet giant, Incremental Clicks Impact of Search Advertising, found 89% of clicks generated through paid search would not have occurred without the paid component. Organic search only bridged 11% of the traffic generated through paid search. Even when a website is ranked number one in organic search results, 50% of the traffic generated through paid search didn’t translate through to clicks from organic search.

However, Bali added that Google’s organic search offerings have improved over the past 12 months with the release of algorithm updates such as ‘Panda’ and ‘Penguin’.

Ikon Communications head of search Simon Dunwoody agreed with a combined approach. “The best strategy is a mix of both paid and organic search – the sum of both is far greater than organic. This is particularly true if you’re a new brand as paid is instant,” he said.

While search and directories account for 55% of online ad expenditure in Australia, according to the Interactive Advertising Bureau and PricewaterhouseCoopers, not everyone believes search should enjoy its place in the pantheon.

Responsys chief marketing officer Scott Olrich said brands need to focus more on relationship as opposed to acquisition marketing.

“Most companies don’t make money from the first purchase. It’s hard to create a long-term competitive advantage that way,” Olrich said.

This article first appeared in the 10 August 2012 print edition of AdNews.

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