Many wonder which is more worthwhile - a PPC or a traditional search engine listing. Each marketing tool has its pros and cons. Proponents of PPC listings say, "Why bother with optimization when you can buy your way to the top of most major engines?" That's not entirely true -- only the highest bidders get into PPC partner sites.

When all is said and done, there are distinct advantages of both of these different type listings. Each has a role to play in a well integrated Search Engine Marketing (SEM) campaign.

The Pros and Cons

There are a number of factors that come into play when deciding whether to use PPC or traditional SEM strategies. Some of these include the immediacy of results, the visibility you get for the money, how well the listings convert, the effort it takes to get listed, the time to manage your bids, and the return on your investment.

Fast Results: Traditional search engine listings take time to appear in search results, it can be a matter of weeks or sometimes months. PPC listings, on the other hand, appear immediately. They can deliver a lot of targeted traffic quickly for a price.

Task Ease: Both type listings require time and expertise for success. Optimization requires keyword research, meta tag and body text copywriting, link development, campaign monitoring, and possible re-submission. PPC ads require keyword research, very specific copywriting knowledge and expertise, trial and error in writing ads that are both compelling and acceptable to editors, campaign testing, monitoring, adjustment, and bid management.

Reach: PPC listings on Overture and Google AdWords Select can get you in Yahoo!, MSN, and AOL, or other partner sites like AlltheWeb, AltaVista, AskJeeves, and Lycos, etc. However, you must bid for the top three to five positions to appear on these sites, and it can be costly, depending on competitors and the popularity of your key terms.

Visibility: It can appear that PPC ads dominate because they're shown above the fold in most major search engines, but "free" listings far outnumber paid listings, generating more clicks. Industry estimates report approximately 70 percent of users click on "free" listings; whereas, approximately 30 percent click on paid listings. So it's wise to optimize correctly for traditional listings, which generally remain in place over time, with fluctuation due to database refreshing.

Conversions: Assuming you make it to the partner sites, conversions can still be a gamble. Some users avoid sponsored listings, although it may not matter to advertisers because they only pay per click. But will you generate enough revenue to pay for the clicks? Your sales revenue minus the cost of sales is your return on investment (ROI). If the cost per click is too high, acquisition costs will be high and ROI will be low. Generally, anything over $0.50 per click can be too high for a good ROI. Unfortunately, competitors can sometimes drive the cost up to force others out.

Cost Effectiveness: Traditional listings can be more cost effective in the long run compared to PPC listings, depending on how popular, targeted, and costly your keyword terms prove to be. The advantages of traditional listings is that they become cost-effective over time and continue to remain in place after initial investment, although they require maintenance and upkeep.

Bid Management: Once PPC ads are accepted, it takes considerable time and effort to manage the bids for cost effectiveness. This can require bid management software or services, although recently, both Overture and Google have provided built-in ad management tools. There's a learning curve to managing bids in a continuously changing environment.

As you can see from the above, it takes different strategies to achieve PPC versus "free" listings. Below are some tips for executing campaigns.

The Integrated SEM Campaign

When launching a new site, first ensure that it is designed and optimized for both consumers and search engines. This will result in the traditional listings that eventually give you the best ROI. To get some immediate traffic, start a PPC campaign that can later be scaled down.

Tips for the Optimization Campaign

Start your keyword research with tools like WordTracker to identify the most popular keywords for your topic area. Look for keywords with a high KEI (Keyword Effectiveness Index). These are words that are more popular and less competitive. Use these keywords in writing your headers, body text, meta tags, and even file names when creating Web pages.

Develop a linking campaign to improve your link popularity, important for high rankings. It's not just the number of links, it's the quality of the sites linking to you (popular, respected sites) and the relevance of their content to your audience that counts.

Submit your site to directories first, starting with ODP and Yahoo!. An ODP listing will help you get indexed in many search engines, including Google. Submit manually, following each search engine's guidelines on the number of pages and frequency of submissions allowed.

Verify and monitor your listings, re-submitting only if necessary. Use paid inclusion for faster listings (sometimes within 48 hours) and more frequent refreshes.

Tips for the PPC Campaign

To keep your costs down, it's important to identify the keywords that are less popular yet still effective obscure phrases that are not commonly used. Again, use WordTracker. You can buy John Lawlor's report listing 10,000 unclaimed keywords, but it takes time and patience to find those appropriate for your ad. Make sure your keywords are relevant to your Web page content and also on the landing page for your ad. Write relevant copy for Overture or Google PPC ads, following their writing guidelines very closely: Overture Listing Guidelines, Google AdWords Editorial Guidelines.

There are specific rules for punctuation and using superlative words (like "best"). The key is to stay away from hype. Use persuasive, compelling descriptions. Be specific because broad descriptions attract unqualified prospects. Create copy that converts to sales. The editors will reject your ad if it's not within the guidelines. Andrew Goodman's report on Google AdWords Select has many good tips for writing the Google ads.

Your best bidding strategy is to start a little higher than you would like initially, then test a number of different ad groups to identify the winners and eliminate the losers. This gradually brings your bids down.

Tweaking Your SEM Campaign for Cost Effectiveness

After launching a PPC campaign to kick-start your listings, and a traditional optimization campaign for long-term ROI, you need to analyze your rankings carefully to identify the terms and the search engines that generate high-quality visitors. You can do this by analyzing Web logs with WebTrends.

Here's where you tweak your campaigns to find the right balance between paid and "free" listings. For instance, if you find that specific search terms are bringing quality visitors from Yahoo! as a result of your Yahoo! paid inclusion listing, why pay for "sponsored links" from Overture? As you get high rankings in your targeted search engines for keywords that generate conversions, why pay for search terms? With measurement and analysis, you can reduce your reliance on PPC as your "free" listings start to pay off.
August 27, 2002

Paul J. Bruemmer has provided search engine marketing expertise and consulting services to prominent American businesses since 1995. As Director of Search Marketing at Red Door Interactive, he is responsible for strategizing and implementing search engine marketing activities within Red Door's Internet Presence Management (IPM) services.

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Search Engine Guide > Paul Bruemmer > PPC Versus "Free" Listings: Which is Best?