SEO Listings Positively Impact SEM Performance
The presence of organic listings on search engines positively impacts the clickthrough rates of paid search advertisements and vice versa, according to a new study by NYU Stern professors Anindya Ghose and Sha Yang.
Using a data set of consumer responses to keyword ads on Google, Ghose and Yang found the following:
- On average, the impact of organic listings on paid advertising is 3.5 times stronger than vice versa, possibly because of the tendency of consumers to trust organic listings more than paid ads.
- The positive association between paid and organic listings increases advertisers’ profits by at least 6.15 percent when compared to profits in the absence of either of them. The positive association is strongest when advertiser-specific keywords are used and weakest when brand-specific and generic keywords are used.
- Clickthrough rates, conversion rates and total revenues are higher when both paid and organic listings are present simultaneously than when paid search ads are absent.
- Combined clickthrough rates are 5.1 percent higher when paid and organic listings are present simultaneously than when only the organic listings are present.
- Combined conversion rates increase 11.7 percent when paid and organic listings are present simultaneously than when organic listings alone are present.
- Paid search advertising drives up to 54 percent of total revenue growth.
The study, Analyzing the Relationship between Organic and Sponsored Search Advertising: Positive, Negative or Zero Interdependence?, assesses the impact of search engine advertising on consumers, advertisers and search engines in the presence of both organic listings and paid advertisements.