Q: I recently set up a Google Adwords campaign, and it contains keywords that already have great organic rankings. Is it possible that the pay-per-click (PPC) ads might take away traffic from the organic results? Also, my conversion rate for PPC is about 4% while conversion for organic search is only about 1%. Can you explain this?

A: This is a question that is close to our hearts, since we primarily focus on organic SEO (or pay-per-click in conjunction with organic). Many providers only work with PPC, and there can sometimes be a rivalry between the two approaches.

We do think that PPC clicks take away from organic traffic in the particular case when you have a high organic ranking for the same term being sponsored. This is commonly called “cannibalization” and you can read some thoughts on it in this 2006 article by Gary Angel.

To quote from the article: “we found cases where half or even more of the paid traffic would likely have arrived from organic listings if the paid ads were not present. That means that the true cost of many of the keywords being purchased was far higher than the buyer realized.”

As the article mentions, and we concur: The easiest way to tell if the PPC clicks are cannibalizing organic listings is to turn off selected sponsorships for a period of, say, a week, and then watch the organic traffic for that term and see if it goes up.

Now, you also have the complicating fact that you’re getting a higher conversion rate on the PPC listings. Our guess is that your users are self-selecting: searchers who are more likely to convert are more likely to click on the PPC listing. We’re not aware of any research proving this, but we think it’s somewhat intuitive that people who are less likely to convert (information seekers, researchers, folks early in the purchase process, job-seekers or folks with other non- commercial goals) are going to lean more toward clicking on organic listings rather that PPC listings. In that case, naturally you’d find a higher conversion rate via PPC. In other words, your organic listings are casting a wider net, while PPC listings are “cherry picking.” It’s also possible that your PPC ads are written nicely enough to grab more targeted traffic – qualifying people before they click – and may be sending them to better landing pages. If that’s the case, congrats! It’s great news for your PPC ROI.

Choosing the best strategy really depends on your needs and preferences. If you are seeking to maximize total sales, maximize visibility (the sense of “blanketing” the search results), or maximize a conversion rate per visitor, then we see no reason not to continue the PPC campaigns. However, if a more efficient ROI is a top priority, or there is a budget cap regardless of ROI, then you might try to finesse your PPC campaigns, turning off certain “high cannibalization” terms and watching conversions to see how they are affected.

Our recommendation is to track both organic & PPC conversions keyword-by-keyword using the same analytics technique, and then do some experimentation with turning on & off terms until you reach an ideal combination of spending and conversions… We know this sounds easier said than done, but keep in mind that any PPC/SEO conversion studies that might exist are much less useful and meaningful than the real data on your specific business and audience that you can gain with your analytics program.