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Paid Search vs. Organic Search: Which Converts Better?

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Paid search visits have a 35% higher conversion rate for e-commerce websites compared with visits from organic search, according to a recent report by MarketLive.

The report, which was based on data from more than 200 e-commerce websites with over $1.5 billion in combined annual sales, found that visitors arriving from paid search links had a 2.6% average conversion rate in the first six months of 2013, compared with a 1.9% conversion rate for organic search visits.

Paid search visitors also had slightly higher average order sizes ($113 compared with $109.66) and pages per visit (7.1 compared with 6.8).

Below, additional key findings from the MarketLive Performance Index.

Paid vs. Organic Mix

  • Paid search visits made up about one-third of total search engine visits in the first six months of 2013 to the sites examined in the study; up from 26% in 2012.
  • Revenue from paid search grew to 44% of total search engine visit revenue, up from 40% in 2012.

Mobile and Tablet Traffic

  • One-third of traffic to the e-commerce websites examined came from from mobile and tablet devices in the first half of 2013.
  • Tablet traffic grew three times faster than smartphone traffic in that period.

Revenue and Conversion Trends

  • The merchants examined recorded a 15% average increase in revenue and 6% increase in conversion in the first six months of 2013.
  • The beauty/health and brand manufacturer sectors each registered strong growth in conversion rates, posting 16% and 14% increases, respectively.

Bounce Rates

  • Although up only slightly, the average bounce rate increased for the tenth consecutive quarter. However, homepage bounce rates were actually down sharply, decreasing 17% on average.
  • Overall, bounce rates ranged from 24% to 40% for the sites examined in the study.
  • The apparel, footwear, and accessories sector, which already had the lowest average bounce rate in the same period in 2012, showed additional improvement, dropping to 24%.

About the research: Volume 21 of the Performance Index was based on data from the MarketLive customer base collected in the first six months of 2013.

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Ayaz Nanji is an independent digital strategist and a co-founder of ICW Content, a marketing agency specializing in content creation for brands and businesses. He is also a research writer for MarketingProfs. He has worked for Google/YouTube, the Travel Channel, AOL, and the New York Times.

LinkedIn: Ayaz Nanji

Twitter: @ayaznanji

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  • by kaulbr Wed Sep 4, 2013 via web

    Paid search has a higher conversion rate than organic search - my guess would be that that's because companies have more control over what PPC keywords they are showing up for. With organic, you may get traffic from keywords you didn't even know you show up for and might not be that relevant to what you offer on the site. Just my guess. Thoughts?

  • by Diane Wed Sep 4, 2013 via web

    I wonder is paid search has higher conversion rates because more PPC ads are sending people to a landing page that encourages the conversion than just a "regular" web page? Really interesting results.

  • by MikeY Wed Sep 4, 2013 via web

    Interesting article. Marketers have been trained to think organic search trumps paid every time.

    Kaulbr, I agree that PPC is more targeted and organic yields more shotgun results. PPC is quicker to react to market needs. An advertiser could create a PPC ad for a holiday sale and have it live in minutes. Organic ranking takes time and nurturing. Also, the search industry and advertisers all have a vested interest to make sure their PPC investments convert.

  • by ed lebar Wed Sep 4, 2013 via web

    a simple question. What is the relative power of paid vs. organic search to drive traffic to our web sites. Or what % of commercial web site visits are paid vs organic. This does make a difference in your calculations of overall visits
    Ed Lebar

  • by Warren Cowan Wed Sep 4, 2013 via web

    For us its not about deciding which one is better as its the same customer at the end of the day.

    You have to take an integrated view, and summary statements like this really cloud judgement.

    I don't doubt for a second that people found paid converted better, but unless you compare investment and ROI at a keyword level, using channel attributed data you're really comparing 2 very different sets of information.

    Paid search is a carefully filtered, timed, restricted, placed and messaged activity ,

    and natural search picks up all that and everything else, so is diluted by additional noise that can't be filtered out, and visits from wider geographies and demographics than can be filtered out at a paid level and more.

    That's to say nothing that paid is more likely to be timed to hit at converting periods, and that traffic that begins in one channel will often convert in the other as the user progresses thorough keywords on their journey.

    At the end of the day its about what the attributed return is, on what you've paid for. Not whether traffic your buying on one end is converting better than traffic which you don't pay for or only pay for some of on the other.

  • by John Ziegler Wed Sep 4, 2013 via web

    So, what is the revenue increase do to the increased conversion rate compared with the cost of paid search versus free organic search? For example, you show a $3.34 increase in average order size. What was the cost per order with paid search?

  • by ed lebar Thu Sep 5, 2013 via web

    Thanks John: Your articulation of the issue is much better than mine. I did find in one of the article on Marketing Profs " Email and Search Deliver More Customers Than Social Media"

    by Ayaz Nanji | July 15, 2013 |

    Read more:

    If iIread the results correctly organic search generated about 60% more new customers than paid. I am not sure how one would do an ROI/or what costs would be included in an ROI for organic search
    Anyway, I think the point is that the use of organic and Paid search together are part of a total program, but determining costs and returns are quite different. and a comparison is maybe difficult?

    Is their away to compare cost and return both average ( or marginal) and total for each?

  • by Bryon Thu Sep 5, 2013 via web

    I think this makes perfect sense. Paid search directs people directly to landing pages designed to generate a conversion; the destinations from natural search are more haphazard.

  • by Gracious Store Fri Sep 13, 2013 via web

    Could it be that the reason why paid search has higher conversion is because Google favors paid search over organic searches?

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