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Search Engine Optimization - home >> Search Engine News >> Balancing the Budget - Paid & Organic Listings



Balancing the Budget - Paid & Organic Listings

The recent Search Engine Strategies Conference in Toronto included presentations on balancing paid and organic listings, a concern for all search engine optimization clients who employ pay-per-click advertising to supplement their online performance.

Joe Laratro, chief technology officer at More Visibility, presented a couple case studies and then later posted some follow-up data that may be helpful as a guide.
In his research, he found there were no uniform trends within industry categories. But he did find that he could classify spends based on percent of online budget allocated to sponsored listings versus organic optimization and XML feeds:

· Aggressive 70% of budget for paid search
· Standard 50% of budget for paid search
· Low margin or ultra conservative 10% of budget for paid search

He outlined factors to be considered in budgeting for costs for your SEO, also.

1. Organic Search Engine Optimization (Natural) Costs

a. Doing the work in-house
i. Staffing costs
ii. Training costs

b. Hiring a search engine marketing agency
i. Consulting fees
ii. Implementation costs

c. If the actual Web site design and programming is outsourced, costs may incur for updates based on either of the first two scenarios

d. XML Feeds (Yahoo Submit Pro) He considersthis part of natural because results are ranked on the same algorithms

2. Paid Listings (Sponsored) Costs

a. Doing the work in-house
i. Staffing costs
ii. Training costs
iii. Software costs for bid management
iv. Software costs for analytics

b. Hiring a search engine marketing agency
i. Agency fees
ii. Extra fees based on reporting or consulting requirements

c. Click fraud monitoring and auditing costs

Some conclusions Laratro deduced from his research include that investment in natural search can reap the most rewards and investment in sponsored listings guarantees the most rewards and can act as a stabilizer to variable natural traffic.
He also found that the XML feeds provided 30% to 40% better ROI versus paid placement in case studies he conducted.But he cites the advantages of paid placement as being very fast, with the ability to produce extreme volumes of traffic and targeting of keywords that may not be attainable through organic listings.

Since there seems to be no industry benchmark data for paid and natural search, every company needs to evaluate allocation of its budget based mainly on performance. Its important to track conversions and monitor how each channel performs. This will help guide you in deciding where to assign your budget online.

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