Conversion Rate from Paid & Natural Search is equal!?!?

by Paul O'Brien / Friday, 29 September 2006 / Published in Analytics, Insights / Research, Natural Search / SEO, Paid Search, Search

Internet Retailer posted an article today citing research from WebSideStory that argues conversion rate from Paid and Organic Search is about equal.I hope you aren’t misled by the article. Let me be clear first, I’m not going to discuss the difference between paid and organic search; You are being misled in that a 9% difference in conversion rate is hardly equal.

The study goes on to conclude that the average difference in conversion rate between paid and natural is a mere 9%. This does a disservice to marketers trying to convince their e-commerce peers why conversion improvement is so important. Most online retailers should do everything possible to improve conversion rate a mere 9%. A 9% difference to a $100M annual business is $9M in incremental sales. Marketers who can not increase advertising budgets and have not been successful increasing traffic to their store but can raise conversion rate 9%, deliver 9% better results. Focus on your conversion rates. Test, Optimize, and design your store based on conclusive evidence of improved conversion, not designer’s attitude or opinion of how your store should look and feel.

Both paid and organic search should both be, for your business, key marketing activities. Disregard the conversion difference in this case, manage paid search to the numbers that perform for you and keep in mind, Organic is still (essentially) free. On the back end, dedicate time and resources to your conversion rate and growing your busy becomes second nature.

Related Questions

What is the actual difference between a startup and a small business?

A startup is designed for exponential, scalable growth and disruption; typically equity-funded and operating at a loss while capturing a large market. A small business is built to be profitable, sustainable, and locally competitive. They require entirely different capital structures, policy environments, and support systems.

What's the difference between an entrepreneur, a business owner, and a startup founder?

These three categories overlap but are not the same. A business owner runs a company, often for stability and profitability. A startup founder is building for exponential scale and disruption, often with venture capital. An entrepreneur is a personality type characterized by risk tolerance, a drive to improve things, and a compulsion to act, even without permission, resources, or approval. Many business owners are not entrepreneurial. Some of the most entrepreneurial people never start companies. Some startup founders are entrepreneurial; others are simply ambitious employees with equity.

What's the difference between a startup ecosystem and an entrepreneurship program?

Entrepreneurship programs teach skills. Ecosystems are economic environments where the conditions for high-growth companies to form and scale actually exist. A city can run excellent programs and still have a dead ecosystem; they're not the same thing.

Why does the glorification of entrepreneurship hurt the economy?

Because it convinces people who aren't entrepreneurial to pursue paths they aren't suited for, without the resources, experience, or intrinsic drive to succeed. The high failure rate associated with entrepreneurial ventures becomes an economic drain when people who want the image of a founder (the recognition, the status) pour capital and time into ventures that were predictably doomed. Glamorizing entrepreneurship as universally great ignores the distinction between the personality type and the career aspiration.

Isn't an entrepreneur just someone who starts a business?

No, and that conflation is doing real damage. Starting a business makes someone a founder or a business owner. Entrepreneurship is the set of behaviors exhibited by entrepreneurial people, which sometimes results in starting a business but is not defined by it. Entrepreneurial people exist in every walk of life (teachers, employees, artists, parents) and their entrepreneurial nature has nothing to do with whether they own a company.