Did you know that a PPC campaign can cannibalize an advertisers organic search listings and traffic in many cases? I did not know this. The most I got from the search conferences I’ve attended - when your in a top search position for organic and you run a PPC ad that’s also on the top, you get an extra lift greater than the sum of each listing.
But that’s not what Gary Angel of SEMphonic was talking about in this article .
In fact, in the case of a well known company who ran a large SEM campaign - when they stoped running PPC ads for 10 days their organic search traffic went up!
| Light Period (PPC On) | Dark Period | |||
|---|---|---|---|---|
| Search Engine | Total SEM Visits | Paid Visits | Organic Visits | Organic |
| 13,999 | 6,662 | 7,337 | 9,424 | |
| Yahoo | 6,926 | 3,052 | 3,874 | 5,191 |
| MSN | 5,535 | 2,617 | 3,318 | 4,628 |
| AOL Search | 1,199 | 770 | 429 | 585 |
The "Dark Period" happened when the advertiser stopped running PPC ads that competed with their own Organic listings for 10 days.
In the 10-day "Light" Period, Fortune 1000 Company X drew 28,000 visits– of which just over 50 percent were from natural listings. This company tagged all PPC traffic with specific campaign values– making it easy to identify the volume from each source. In the Dark period — with other traffic very slightly down — organic visits were up to nearly 20,000. Taken at the highest level, this means that their PPC program was providing significant incremental traffic (a 41 percent lift over organic traffic alone). However, it was also significantly cannibalizing organic traffic. Depending on engine, anywhere from 20 percent to as much as 50 percent (half!) of all PPC clicks would have been delivered organically.
Think of it this way– if Fortune 1000 Company X is paying MSN $1 per click, it is actually paying $2 per incremental click because it would have gotten half of its PPC clicks for free through organic. This is a dramatic difference when it comes to evaluating PPC effectiveness and internal PPC optimization. This does not mean that buying cannibalized words is always a bad thing. If the initial cost was low enough, then the incremental cost may still be lower than comparative buys on other terms. The main point is that there is no way to accurately judge the true incremental cost of a word unless you’ve measured organic cannibalization!
In fact, the better your search rankings for keywords you care about - the more running a PPC campaign, that includes the same keywords your ranking for organically, hurts the organic traffi you could have got if you did not run the PPC campaign.
The higher the organic position, the more likely cannibalization was to occur. It was difficult to study the impact of paid position, because Fortune 1000 Company X was almost always in the top two slots.
Here are some sample results showing cannibalization by organic position:
Search Keywords Organic Position Cannibalization Term 1 2 18.20$ Term 2 1 37.20% Term 3 1 22.20% Term 4 8 3.60% Bottom line, if your SEM provider isn’t accounting for organic cannibalization and you have a significant natural presence, then chances are they are seriously mis-optimizing your campaign. Indeed, it seems likely that the worst possible scenario would be to use an automated PPC management tool that isn’t taking account of organic cannibalization. Such a system would be particularly efficient at steering dollars into terms whose apparent (but not real) incremental cost is artificially lowered by organic cannibalization.
Interesting….just one more thing to think about. Ok, who ever said that making money on the internet is easy?
\
Current Subscribers
