It’s somewhat common knowledge that when someone performs a search, there will be a box of “Sponsored results” to the left, above, and sometimes even below the organic results. Bing has a paid service, as does Yahoo and Google has their AdWords which proved a business in search can be profitable. There’s a discussion lately surrounding paid search advertising and the big 3 search engines, and if you’re not careful with how you read it, you may walk away with the wrong idea.
Compared to this time last year, the CPC for Google has fallen again, for the second quarter in a row while Bing and Yahoo’s CPC have continued to climb. On the surface it’s a statement which can make it sound like Bing and Yahoo have been managing to grab ad space from Google. The point closer to the truth however is more to the tune that Google has become an even better choice to advertise with, as opposed to Bing and Yahoo. Search engine marketing via the AdWords platform or one like it, has to be measured differently than the organic results, you can’t take positioning as the end goal.
When you begin to break down the numbers involved in SEM and SEO, there are some key differences that you need to understand. They both depend on conversion rates, because without converting your traffic, you’re wasting time and money. One of the largest, and most important difference however is the click through rate of your positioning. You could be ranked at the very top of the AdWords results, but if you have a poorly written ad, or a poorly built website, chances are your conversions will be limited.
Another major point you need to keep in mind is cost per click, or CPC as was being discussed earlier. Where paid advertising is concerned, CPC is a literal interpretation of how much it is costing you to have someone click on your listing. Organic SEO is more difficult to define, as you’re not paying each time someone clicks your organic listing, but after a few months you can more easily break it down. A high cost per click for your search term can mean that there are many people in the same space, or, it can mean that one of your competitors is driving up the bid on the keyword to try and gain dominance. A declining average cost per click isn’t necessarily a bad omen, it can point to reduced competition, it can also mean an improved conversion rate.