Paid vs. Organic Search: Understanding the Dynamics

“Why are we buying our brand keyword when we already rank #1 in the organic results?” “Why are we paying for traffic if we’re already getting it for free?” It turns out that the question isn’t whether or not you should be buying your brand keywords. The question is how much should you be willing to pay for that ad, and what should it say.

For search marketers like me (and probably you), the question of how to balance the paid/organic dynamic has been around for years. So why is there such an amazing dearth of good information on this topic? Why isn’t there any kind of industry-accepted framework with which to address the age-old question?

I believe that the reason is that the conversation around the interaction between paid and organic search has historically been sorely lacking any good data. As a result, we get stuck talking about opinions and assumptions, and we typically don’t come to any meaningful conclusions. I am grateful that at this point in my career, I am surrounded by savvy marketers who understand how search results pages (SERPs) work. They understand that the SERP is a complex landscape, that each link has its own clickthrough rate (CTR), and that any link’s CTR is affected by the other links with which it shares the SERP. This is the path to meaningful dialogue on the subject, so I encourage everyone to get intimately familiar with the data around the paid/organic dynamic.

So how do we look at the data in a way that can help us understand this phenomenon? First let’s get a few ground rules straight:

  • What keywords are we really talking about? Those that match exactly with your brand name or branded product name, where there is generally no competition. So if you are the Acme Widget Company we would be talking about keywords like “acme” and potentially “acme widget.”
  • What are we actually trying to compare? Ultimately we want to compare two different conditions: a) a SERP where the organic link for brand keyword is ranked #1 with no PPC ad (and no competitors’ ads) present and b) a SERP where the organic link for a brand keyword is ranked #1 with a #1 rank PPC ad (and no competitors’ ads).
  • What phenomena are we trying to measure? In the above cases there are two things that normally happen. I call them cannibalization and lift. “Lift” is the net amount of traffic that is added to the mix by virtue of the PPC ad. Cannibalization is the portion of PPC ad traffic that comes at the expense of the organic link. If you can quantify cannibalization and lift in any situation, you can then begin to think intelligently about what to do.

One thing we need to also acknowledge is the fact that the many variables affecting paid and organic search traffic—search volume, page layout, keyword bids and rankings—prevent us from doing any rigorous scientific testing around the paid/organic dynamic. It’s simply impossible to isolate all the variables necessary to completely understand what’s going on. However, there are some terrific ways that you can at least gather some meaningful data that can be interpreted and analyzed, and from which we can actually draw very useful and actionable conclusions.

Next, let’s agree on a few basic principles:

  • Internet (and search) traffic patterns move in weekly cycles.
  • Search volume is affected by seasonality, media and other factors.
  • You’ll want to “test” in a period of minimum volatility (avoid holidays and seasonal peaks and dips if possible).

Now, consider the following approaches to gather the data required to quantify cannibalization and lift:

  • On/off weekly: Pause your paid ads for one week and then resume. This is the simplest approach and takes the least amount of time. If you have more time, try alternating weeks as long as you need.
  • On/off daily: For a two week period, alternate pausing and activating your paid ads on consecutive days. Why two weeks? This is the minimum duration required to get both “on” and “off” data for each day of the week.
  • These are just examples. Use your imagination to design something more elegant if you have more time or budget.

    Now What?

    Now, you need to gather your data and estimate your lift and cannibalization. The incredibly tricky (and potentially inaccurate) part of this is trying to establish a baseline for organic traffic. Naturally, you will want to use the organic traffic during “off” periods as a baseline, but what about the “on” periods? What would the organic traffic have been without the paid ads present? For this you will need a third data point. Either use averages of organic traffic during “off” periods that bookend an “on” period, or if you have access to data like search volume for a given keyword, you can use this trend to estimate what your organic baseline should be.

    The key here is to come up with an approximation for cannibalization and lift. It doesn’t have to be perfect, because you’re going to use this data to determine, based on your business goals, what you should be willing to pay for a click on your PPC ad. Here’s an example:

    Let’s use a day’s worth of data, and suppose we determine that our organic baseline traffic is 100 clicks. When we add a PPC ad, that ad provides us with 100 clicks, but when we do so, our total organic+paid total is only 180 clicks. That means that of the 100 PPC clicks we bought, 80 were “lift”, and the other 20 were “cannibalization.” Then, all other things being equal, you should discount your maximum allowable CPC on your brand keyword by 20% to account for the cannibalization, and adjust your bids accordingly. Make sense?

    Finally let’s look at the extremes. If your PPC traffic is 100% lift, then you can confidently say that buying your brand terms is absolutely justified, and you have the data to prove it. What, then, if all your PPC traffic is cannibalized organic traffic? If that’s the case, then you had better have an incredibly good reason for paying for the PPC ads. One reason might be that you want to put a differentiated message in front of people, a message that’s not reflected in your organic link. Possible reasons for this might be a brand re-launch or a strategic event like an important product launch or corporate milestone.

    This may sound complicated, but I can assure you it’s both do-able and worthwhile. I just completed a study for one of our keywords and I can tell you that I am ecstatic about the results. I can’t wait to share them around the company! Good luck!

    Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

    Related Topics: Channel: SEO | Industrial Strength


About The Author: is Vice President, Marketing at Move, Inc., parent company of and other significant real estate-focused web properties. In this capacity, Roth oversees Paid and Organic Search, Affiliate, Mobile and Social Marketing for the Company. Prior to his arrival at Move, Dave was Sr. Director of Search and Affiliate Marketing at Yahoo!, Inc.

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  • jeffbullas

    I agree there is very little information on the dynamics between paid vs organic.. keep up the great work
    Cheers Jeff Bullas

  • kennyppc

    another reason to pay for branded traffic in PPC ads could be if your brand name is generic enough (eg, contains a word that is high volume in your industry) that other advertisers who are phrase/broad matching on general industry terms show up for queries on your brand terms without specifically intending to bid on your brand. in that case, you could assume that you won’t lose any traffic to those advertisers even if you only have an organic listing, but i have seen that not to be true. taking up more real estate with a #1 ppc ad too gives you a better shot of not losing that traffic, and the assumption that the user will always choose rightly with your organic link is a really poor one. so sometimes paying for brand terms as a defensive mechanism can be important as well.

  • tearles

    I recently attended a marketing conference and saw a Google speaker discuss another relationship between paid and organic results on branded search. Unfortunately, he didn’t provide the presentation to the attendees, but here’ s what I recall.

    Google performed some market research and showed two sets of search results to groups of people. I think the search had to do with GE, Siemens, and GE’s “ecomagination” campaign. In the first group, they did a branded search on GE and, of course, GE was the first organic result. Siemens showed up in paid position one. The second group used the same search phrase, GE still showed up at number one organically, but GE also had the number one paid position, right above Siemens.

    The two groups then were asked a series of questions, including who they thought was the market leader. Twenty percent more people said GE was the market leader in the group that saw GE’s first place paid ad than did in the other group. In other words, the paid ad provided significant brand-building value, without even requiring a click.

    Now, as to how to value that branding lift …

    Tracy Earles
    VP, Marketing and Bus. Dev.
    Parallel Path Corp. (

  • Ben Gott

    Thanks David, its good to see someone suggesting a sensible methodology for testing this. As a paid search campaign manager It’s always tempting to argue the case for brand term PPC ads but I’d rather have an informed view.

    I thought it’s probably worth mentioning the effect of the brand terms on quality score also. We’ve seen cases where brand terms have given entire campaigns and accounts a boost in quality score leading to lower CPCs all-round.

  • MarketingJamie

    Thank You David, you’re right. Keep posting some great post. I will surely talk about this on my blog. (


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