Home > Industry > Saving Too Much on Your Paid Search Campaigns could Cost You a Bundle!

Saving Too Much on Your Paid Search Campaigns could Cost You a Bundle!

Those familiar with SEM (Paid Search) and SEO (Natural Search) understand the distinct advantages both can bring to any search engine marketing strategy. Over the years, SEM and SEO have both proven to be effective marketing channels in driving clicks and conversions. In this article I’d like to take closer look at what happens when SEM and SEO converge and attempt to answer this question:

Should you remove pay-per-click keywords that generate Natural Search results from your paid search campaign?

The initial response from some may be, “Of course! Why pay for a click if you can get users to click on the free Natural Search result?” In theory this may sound great, but there are some drawbacks. Let’s take a closer look to understand the potential downside. I’ll frame it by asking two basic questions:

A. What cost savings do I gain by removing paid search keywords that also have natural search results?
B. What are the hidden costs of removing paid search keywords that also have natural search results?

What cost savings do I gain by removing paid search keywords that also have natural search results?

If your business generates both natural and paid search results when a user searches on a particular keyword (e.g. oranges), and users click on the natural search results instead of the paid search results, you then eliminate the cost of that click (e.g. 50¢). Multiply that by the number of clicks the keyword receives (e.g. 25 clicks) and the savings are obvious (25 x 50¢ =$12.50). Make the same calculation for all your keywords that generate natural search results and you have your potential cost savings.

However, don’t remove all keywords which appear in natural search results just yet! The example above assumes that there will be a natural search click after removing a keyword from your paid search campaign. In reality, this will not be the case more often than you might think. I will provide more details on that in the next section.

So then, in which cases can you remove paid search keywords from a campaign and be confident that searchers will continue to click on your natural search results? Removing paid search keywords is probably a good move when you satisfy ALL of the following characteristics:

1. The paid search keyword is an EXACT match type.
2. Your paid search listing is north (stacked above the natural search results)
3. Your natural search listing(s) is in the top position within the natural search results section
4. There are no other competitors appearing as a paid search result for the keyword

These keyword scenarios provide great opportunities for cost savings. Choosing to remove keywords that stray from the above characteristics may give you additional savings, but it’s likely that you’ll also be leaving some of your clicks on the table. It’s important to monitor whether or not your total clicks (across natural search and paid search) are decreasing for these keywords. If they are, you need to be sure the tradeoff with the reduced number of clicks does not affect your conversions, which leads us into the next question.

What are the hidden costs of removing paid search keywords that have natural search results?

If you’re not careful when removing paid search keywords, and simply expect the natural search results to recoup those clicks, the hidden costs can come in the form of lost clicks and conversions. Here are a few ways you might end up leaving conversions on the table:

1. Removing a keyword from paid search can open the door for your competitors

There is the potential here that your competitors will occupy the paid search result that was vacated. This is especially true when the competitor may already occupy the north paid search position (located above the natural search results).

2. Clicks will be lost from paid search results which were not in the top positions

Paid clicks that historically have not come from the very top paid search positions (i.e. position 1 through 6) are likely the result of searchers who canvassed the entire search engine results page and then found your paid search ad and clicked as a result of the compelling nature of the message in your paid search advertisement. Because businesses cannot control the text abstract that appears with natural search results, you should consider whether the small abstract on the natural search results will capture the interest of the users without the tailored message from the paid search advertisement.

3. Loss of exposure from free impressions

The vast majority of search advertisers have their campaigns running on the pay-per-click model. By definition, for any impressions that your keywords generate which do not register a click, there is no financial cost. Removing those keywords from your paid search campaigns will eliminate all the impressions that were potentially generating free brand awareness, and any searchers who clicked only because of the more frequent exposure to the advertisement.

In conclusion – Proceed with caution!

The savings from removing paid keywords are obvious: no click on a paid search result means zero cost. However, before removing these paid keywords, you really want to consider how likely you’ll be able to recover that potential click from only the natural search results. Individually evaluate the tradeoffs for keywords that you consider removing, and ensure you have a tracking system, such as MOJO SEM and Mediaplex Natural Search, in place to understand if you’re still capturing clicks and conversions through the natural search results for each keyword you remove from your paid search campaign. If not done properly, your initial cost savings may turn into a larger loss to your bottom line.

Categories: Industry
  1. Caroline
    July 13, 2010 at 9:38 am | #1

    That is a very well done. Very interesting Jason and a good take on SEM budgets.

  2. July 13, 2010 at 9:45 am | #2

    This is a great article Jason.

  3. David
    July 13, 2010 at 11:27 am | #3

    This is really helpful and not as black and white as I thought. Thanks!

  4. Sara deVille
    July 13, 2010 at 9:04 pm | #4

    Excellent points. I have found that Mediaplex search tools are much more than just an “add-on” to the adserving platform, and in fact give stand-alone offerings the likes of Marin, Kenshoo, and Omniture a real run for their money.

  5. July 16, 2010 at 8:46 am | #5

    What a great resource!

  6. July 18, 2010 at 2:11 pm | #6

    I’ve recently started a blog, the information you provide on this site has helped me tremendously. Thank you for all of your time & work.

  7. July 18, 2010 at 10:00 pm | #7

    nice post. thanks.

  8. July 20, 2010 at 1:52 pm | #8

    found your site on del.icio.us today and really liked it.. i bookmarked it and will be back to check it out some more later

  9. July 20, 2010 at 4:43 pm | #9

    nice post. thanks.

  10. MarcYS
    July 23, 2010 at 7:24 am | #10

    Great post! :D

  11. July 24, 2010 at 4:18 am | #11

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  12. August 5, 2010 at 11:40 pm | #12

    There’s lots of interesting info here, thanks to the poster.

  13. January 24, 2011 at 10:41 am | #13

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