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The Balance Between Paid and Search – Doug Bell // Searchmetrics

Episode Overview: Striking the perfect balance between paid and organic search optimizations depends on a variety of different factors. Join host Ben as he speaks with Searchmetrics’ CMO Doug Bell on how you can strike the perfect balance between paid and organic search endeavors for your business and brand.

Summary

  • Although balance ratios vary by company, it’s common to see B2Bs with an average 70 organic/30 paid ratio.
  • Top of funnel endeavors are generally organic, while bottom of funnel are paid.
  • Most ecommerce firms follow a 90/10 organic to paid ratio but if you’re unsure where to start with your own business, 50/50 is a good starting point.
  • Paid endeavors are useful to help validate keyword sets and provide insight on whether optimizing existing content is worth it.

GUESTS & RESOURCES

Ben:                   Welcome to the Voices of Search podcast. I’m your host, Benjamin Shapiro. Today we’re going to talk about understanding the point of diminishing returns between your paid and organic search campaigns. Joining us as Doug Bell, who is the CMO of Searchmetrics, which is an SEO and content marketing platform that helps enterprise scale businesses monitor their online presence and make data driven decisions. Today, Doug and I are going to talk about the balance between paid and organic search. Okay. Here’s the first part of my conversation with Doug Bell from Searchmetrics. Doug, welcome back to the Voices of Search podcast.

Doug:                Hey Ben, it’s good to be back.

Ben:                   It’s always a pleasure to reconnect. Today we’re going to talk about some more content that we feel like is relevant, not only for the search community, but also for everyone’s boss, the CMOs, the Doug Bell’s of the world. We’re going to talk about the balance between paid and organic search. But when you sit down and think about your marketing mix, you’ve told me that this is something that you’re regularly working on, just high level, how do you think about the balance between paid and organic search?

Doug:               Oh boy, I got to tell you, it is a simple formula and also a complex one all at once. So for us, generally speaking, what we’re looking for is we want to be driving … Let’s just put it in terms, maybe of site traffic. I’m looking to drive 70 to 80 percent of my site’s traffic through organic, that’s typical, and then roughly about 20 to 30 percent occurring with paid. Then in terms of balance, if you’re looking at the funnel, traditional funnel, top of funnel, mid and bottom of funnel, what’s typical for us is about 70 percent of our top of funnel traffic is coming from organic and about 30, as we get closer to the bottom of that funnel, it shifts. Towards the bottom of the funnel, this is pre-COVID, we were looking at roughly about half of our sales accepted leads, let’s say that’s the bottom of our funnel, were coming from paid initiatives.

Ben:                  So talk to me about why you think search is great for building the top of funnel awareness, sort of lead generation, and why does it fall down at the bottom of funnel where your paid campaigns take over?

Doug:               Well, the first thing I would say is I would actually reverse it a bit. I’d say that generally speaking, it’s that evergreen and topical content from organic that’s driving a lot of that top of funnel traffic. Where we find paid to be really successful for us, is on kind of one off … the informational topics, if you will. That’s where we tend to see a lot more performance there. It’s also great if we’re looking to get into an area that we just don’t have a lot of traction with. It’s a hell of a great way to test content as well prior to developing evergreen content, or prior to developing organic content to try and gain some of that share.

Ben:                  So I think that’s an interesting point that you’re able to use your paid campaigns to understand where there is interest in your brand, and then you work towards developing your organic content, which has meant to be a more evergreen type of marketing strategy.

Doug:              Yeah. I think that’s typical though. I do think that’s typical. I think especially for B2B marketers, we tend to think of paid sometimes in terms of our ability to generate hot leads that end up with the sales team. I think if I could dare to say that we are more sophisticated, but for those of us that maybe just have a little more experience or happen to work for a digital marketing company, we will use, as I like to say, use paid to surge and trail with SEO. That’s our typical balance when it comes to digital.

Ben:                 I feel like paid most of the time ends up being an addictive drug for marketing executives, where they understand that they can put a certain amount of budget and they start to see business results, but they’re always wanting to put their foot down on the throttle and start to scale it. At some point that becomes difficult either because it’s incredibly capital intensive or because you’re starting to see diminishing returns. At what point should marketers start to think about mixing in more organic or basically getting to the point where they’re not continuing to push more and more of the drug to try to drive business performance?

Doug:             Well, I’ll tell you what Ben, that is such a big topic for us. I think we could probably spend an entire episode just digging through it. But let me try and boil things back for us if we can. So here’s what I’d say. Yes. I agree. I think it can become addicting, the paid portion because it’s not immediate gratification, but as long as you’re in a place where you’ve correctly identified … Let’s use PPC as an example. That you have high quality scores for your landing pages. You’ve identified high performing keywords for keyword sets, and you’re able to consistently spend and predictably have pipeline coming through, that’s mono, right? And that’s typical for most of the Mos, they have that type of mix where they can rely on it.

                         You mentioned the point of diminishing returns. That’s usually the thing that forces you to make this evaluation or decision about whether you continue to chase a campaign or a particular channel down that diminishing curve. So really typically your paid people will come to you and let you know that your cost per acquisition is going up, that your conversion rates are going down. Usually, that’s a sign to take a look and see whether or not you can trail with SEO, if you will.

                        I think you also make another interesting point. It’s the difference between a micro and macro point of diminishing returns. I just described a situation where a particular campaign is underperforming, that’s typically because, and especially for bottom of funnel keyword buys, what you’re talking about there really is just that much more competition pilling, and we can all understand. But there is this macro trend, which is this point of diminishing returns for the industry in general.

                       That’s been fairly clearly happening since the early 2010, specifically, we know this is happening because we’re seeing that the average increase in spend year-over-year has been declining really since about 2010. It used to be 20 percent plus, and now it’s about 7 percent gross. It’s still healthy. It’s still an idea to own Google and Facebook stock, but overall, the market is behaving in this manner that tells you that at the end of the day, marketers are in less than less confident in their paid investments.

Ben:              Yeah, I think as more dollars have been shifted towards digital marketing, we’ve seen more competition for the performance marketing channels, which inherently makes them either more expensive or more efficient, depending on who you are. You mentioned that you use paid as a lead in and search trailing campaign. Walk me through what you mean by that.

Doug:            Great. Okay. So, and you mentioned it yourself as well, Ben. Again, it’s not as simple as standing up a landing page and bidding on certain keywords, it’s got much more difficult than that. I’m harking back to the early 2000s when it was that simple, but you can fairly quickly establish an ROI for a given set of keywords. What’s typical for most marketers is that they made an attempt at really gaining that SEO ground at some point, or very, very possibly, you have content that’s floating at the sixth, seventh, eighth position, or maybe even on page two, that can be optimized. That’s what I really mean.

                         You can pay for being at the top of the page SERPs, but take advantage of the fact that, and if you’re any older than say a three or four year old company, you probably have content that’s floating at the bottom. That’s incidental. In other words, you have that opportunity there and should take advantage of it. By the way, would highly recommend that tactic.

                        But you can also identify what type of content is performing with your competition, and then attempt to really bring yourself up to the top of the SERPs and boy that’s a whole other lesson on SEO. But that’s really what I’m talking about, that at the end of the day, if you can prove the ROI for a particular keyword with paid and you start hitting the point of diminishing returns, you owe it to yourself to determine whether or not you can acquire that similar space, or that similar spot in the SERPs using organic search.

Ben:              So for the search operators that are listening to it wondering what exact speak Doug is talking about. The important takeaway here is that when you’re sitting and looking at your keyword strategy, and you’re realizing that your ranking outside of some of the top positions for what you think to be pretty impactful, potential keywords, if you’re seeing good traffic and conversion rates from a placement that is not on page one or down at the bottom of it, you can use your performance marketing campaigns to try to understand whether it’s worth the effort to continue to optimize that page.

                       So you’re using your performance marketing budgets, or you’re working with your performance marketing team to try to basically get an understanding of whether it’s worth the optimization efforts to boost a page up to the top. I think the important thing to keep an eye on here, and Doug, I want your take on this, is when you’re evaluating the conversion rates from organic and paid, those aren’t always necessarily the same. Doug. How do you tell the difference in terms of conversion rate and honestly user experience when you’re comparing your paid versus your organic search efforts?

Doug:          You know, I think it’s helpful to understand that ultimately the clickthrough rates diminish very quickly, and I think we understand this. This is true for both paid and for organic results. But the difference between how consumers react at this kind of top level to the ads is pretty clear, right? So 70 to 80 percent of all searchers ignore paid ads and they’ll focus only on organic results. So what that effectively tells me is that you’re paying for a much smaller TAM than if you’re able to have a top ranking when it comes to organic.

Ben:             TAM being totally addressable market.

Doug:          Yeah, sorry for the CMO speak, but thank you. We also know that frankly, that there’s a lot of reward for people that actually can achieve that top spot, right? So again, it depends on the category, but click through rates for the number one SERP in organics is about 52 percent. You look at paid, it’s somewhere around seven percent. So right there that pretty much tells you that there’s this entire industry that exists simply because of that click through rate, and that’s organic, that’s search compared to the ability to have a much lower click through rate when it comes to that first pay ad that’s served up. That’s why people have invested so much money in SEO.

Ben:            Yeah. I think that’s really important that when you’re thinking, “Okay, I’ve got a keyword and I think it’s an important one. I think we’re seeing good conversion rates when somebody gets to this landing page, but we’re in spot 10. Should I bother to try to optimize this page to get to the top of the page?” Well, all right, here’s what I’m going to do. I’m going to run a performance marketing ad. I’m going to put my PPC campaigns on Google, or I’m going to cuddle up with my coworker in the next desk and say, “I want you to run this ad for me so I can understand how important this placement is.” You’re likely to get a seven percent conversion rate. So that isn’t an apples to apples comparison of all right, what happens if I rank number one? Even though both placements are at the top of the page, is really more of a comparison of what happens if I’m able to optimize my way up to around the third or fourth spot, that’s about a seven percent click through rate.

Doug:          Yeah. So you’re exactly right, Ben. So it’s not, what’s the saying, I don’t have to outrun the bear, I have to outrun you, and that’s true for the SERPs, right? So just each of those spots tends to have such a higher return on investment. Again, if your top spot … By the way, that’s the most generous conversion rate I can give for paid is seven percent. Much more typical is two or three percent. Again, it falls off again, as you get to the second and third spot or gosh, worst yet, I’m forgetting the bottom of the SERPs for the paid.

Ben:            So the takeaway here is that if you’re comparing your performance marketing campaigns, and you want to understand the value of a given keyword to you, and you’re going to use performance marketing to understand how important that page is, really what you’re comparing is the performance marketing efforts are going to get you a seven percent conversion rate, which is the equivalent of saying, “I’m going to have a top five placement in search.” So if you are outside of the top five, you can use your performance marketing budgets to evaluate if your campaigns are going to be worth optimizing?

Doug:         Ben. That’s right. And Ben part of the reason I referred to using existing content or refactoring existing content is because quite often, and it’s typically not that difficult to actually make some changes, there’s a little bit of research involved, but you have content that’s been indexed by Google that with some changes, you can grab that sixth, fifth, fourth spot, and then suddenly you’re saving a tremendous amount of money that you otherwise would be spending on paid.

                     But what I don’t want to do is give the impression that paid is bad and organic is good because the flip of that, Ben is, it took a hell of a lot of time and a lot of effort to invest in creating the content, publishing it to the site, getting some promotion of it, doing some linking so it’s actually getting some pickup, and even getting to the bottom of the SERPs for page one or top of the page two.

Ben:            So for the marketing execs and the search leaders that are listening to this podcast, what advice do you have for them to figure out what the right blend is for them?

Doug:         You nailed it. You actually nailed it a bit ago, right? Which is when you’re going after a unique keyword set that you currently don’t own, always start with paid. Then typically what we’re doing is we’re creating landing pages or we’re creating trailing content if we suspect we can also grab that portion of the service with SEO content.

Ben:            Okay. Yeah. So there’s a couple different ways to use paid and organic search strategies together to help each other. First, you can use paid to validate your keyword set. Then you can also use paid to understand if you have existing content that’s worth optimizing. At the end of the day, Doug you said, “Hey, our balance is 70 to 30. We want most of our traffic coming from organic and we’re driving some bottom of the funnel activity using our paid campaigns.” Is the balance the same for most businesses or is it 50/50 for some and 40/60 the other way? Or is the 70/30 balance something that all brands should strive to achieve?

Doug:          Yeah, roughly half of all site traffic globally is generated through organic, but every business has a slightly different nuance. So if you’re B2B, you’re likely going to be more closer to that 70/30 ratio, Ben. Part of that has to do with the size of your paid budgets. Part of that has to do with your relative level of sophistication. In other words-

Ben:             How big your keyword set is.

Doug:          Exactly how big your keyword set is. You also don’t have a team of 20 digital marketers at your beck and call compared to say an ecommerce company. I would tell you that some of the more impressive ecommerce firms can be in that 90/10 ratio of organic to paid, which is really quite impressive, and I have no idea how they pull it off. But I think a 50/50 ratio is a good solid point to start with.

Ben:             Okay. That wraps up this episode of the Voices of Search podcast. Thanks for listening to my conversation with Doug Bell, CMO of Searchmetrics. We’d love to continue the conversation with you. So if you’re interested in contacting Doug, you can find a link to his LinkedIn profile in our show notes, you can contact him on Twitter. His handle is MarketAdvocate, or you can visit his company’s website, which is searchmetrics.com. Just one more link in our show notes.

                      I’d like to tell you about, if you didn’t have a chance to take notes while you were listening to this podcast, head over thevoicesofsearch.com, where we have summaries of all of our episodes, contact information for our guests, you can send us your topic suggestions or your SEO questions, which we’ll answer live on our show. You can also apply to be a guest speaker on the Voices of Search podcast. Of course, you can always reach out on social media. Our handle is voices of search on Twitter, or you can reach out to me directly. My handle is BenJShap, B-E-N-J-A-S-H-A-P.

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