The Relationship between Organic Ranking & Paid Listing
Compared with traditional marketing channels, search engines provide companies with a more accurate and efficient path to reach customers. Google alone has a search engine market share of over 92%.
To obtain search engine traffic, businesses mainly have two options, namely organic ranking (SEO) and paid listing (SEM). Many companies often face the dilemma of choosing between organic ranking and paid listing. Which ranking method is better? Do the two conflict with each other? Or can they coexist together?
The choice Groupon faces
Groupon, founded in 2008, is the largest group buying website in the United States and one of the largest e-commerce groups in the world. For many years, Groupon has mainly relied on bulk emails to obtain orders from merchants, and then promoted discount information to users on the platform. This high-intensity promotion model allowed Groupon to successfully open up the North American market.
However, with the rise of mobile Internet, this traditional model began to fail in 2012: although the number of users doubled, actual sales stagnated. Groupon realizes that to succeed in the next decade, it must embrace mobile internet and organic search traffic. So I created an official website and started investing heavily in SEO.
In a short period of time, Groupon’s website traffic increased by more than 2 times. At the same time, however, order volumes from traditional marketing channels have declined. Groupon had to face a difficult choice: should it continue to invest in SEO, or should it immediately buy traffic through SEM to restore orders? This choice is related to the future survival of the company.
What is Organic ranking and paid listing?
1. Organic ranking (SEO)
Organic ranking refers to the position in a search engine’s search results where a web page naturally ranks based on search algorithms and relevance. These placements do not require paying search engines directly, but instead optimize aspects of the site’s content, structure, and links to increase visibility in search engine results. The goal of SEO is to attract traffic organically and improve a website’s ranking in search engines.
The importance of SEO is that it helps to improve the visibility and brand awareness of the website, allowing it to obtain higher organic rankings in searches for relevant keywords; in the long run, the traffic attracted through SEO is usually organic and has a higher High conversion potential; SEO is a key factor in establishing the authority and credibility of your website.
2. Paid listing (SEM)
Paid listing is a way to obtain advertising position by paying search engines a certain fee. At the top or side of the search results page, usually labeled “Ads,” these are placements purchased by advertisers. The order in which ads are ranked usually depends on factors such as advertiser bid and ad quality score.
The importance of SEM is that it can quickly increase the website’s exposure in search engines, especially on highly competitive keywords; advertisers can adjust advertising according to needs and control advertising costs by setting budgets; SEM provides detailed Advertising performance data allows advertisers to accurately assess the effectiveness of advertising campaigns.
What Experts Say About Organic Ranking vs. Paid Listing
Are we familiar with the choice between organic ranking and paid listing? Charlie Lucas, one of the founders of Google, is very optimistic about the potential of the former. He clearly said: “SEO is the future of marketing.”
Internet marketing expert Phil Knott said: “Paying customers are for the next few weeks, and SEO customers are for the next few years.”
More marketing experts and entrepreneurs expressed their views:
- Gary Illyes, senior product manager at Google: High-quality content and user experience are the keys to success. This isn’t just important for ranking, it’s also about the quality of customers you get.
- Amazon founder Jeff Bezos: You must have the patience to continue investing in SEO to benefit in the long term. You can’t acquire customers solely through paid advertising.
- Search engine marketing expert Kevin Indig: Organic ranking builds brand trust, and paid listing achieves short-term sales goals. The two can be perfectly combined.
Conversion rate between organic ranking and paid listing
| Industry | Organic ranking conversion rate | Paid listing conversion rate | Statistical data source |
| Retail | 2% | 4% | Smart Insights |
| Catering | 3% | 5% | Opteo |
| Real Estate | 1.5% | 3% | SEO.com |
| Car Sales | 2% | 4% | Search Engine Journal |
| Culture and Entertainment | 1% | 2% | Smart Insights |
| Educational Services | 1.2% | 2.5% | SEO PowerSuite’s “2023 Educational Website Digital Marketing White Paper” |
| Financial Services | 0.8% | 1.5% | Search Engine Watch’s “2023 Financial Industry Digital Marketing Forecast Report” |
| Healthcare | 1.0% | 2.0% | Moz’s “2023 U.S. Medical Website User Behavior Insights Report” |
| E-commerce | 2.5% | 4.2% | Shopify’s “Global E-commerce Digital Insights Report 2023” |
| Travel | 1.1% | 2.2% | Travel Weekly Asia’s Post-COVID Travel Industry Digital Report 2023 |
| Legal Services | 0.6% | 1.2% | Moz’s “2023 U.S. Legal Services Website User Behavior Insights White Paper” |
| Building Materials and Home | 1.8% | 3.1% | Ahrefs’ “2023 Digital Guide for U.S. Home and Building Materials Companies” |
| Agricultural planting | 1.2% | 2.3% | SEO PowerSuite’s 2023 Global Agricultural Technology |
| Digitalization Report Energy Mining |
0.9% | 1.8% | Search Engine Journal’s 2023 Digitization of Energy and Resource Extraction Industry Report |
| Cultural Media | 1.0% | 1.5% | Smart Insights’ “2023 Cultural Communication Industry Digitalization Report” |
| Machinery and Equipment | 1.3% | 2.5% | SEO Tribunal’s 2023 Digital Guide to Global Industrial Manufacturing |
| Automobiles and Parts | 1.2% | 2.8% | Search Engine Journal’s 2023 Automotive Manufacturing Digitalization Guide |
| Aerospace and Defense | 0.8% | 1.5% | Aviation Today’s 2023 Global Aerospace Digital Insights Report |
| Petrochemicals | 1.1% | 2.2% | Hydrocarbon Processing’s 2023 Digital Guide for Global Petrochemical Companies |
| Food and Beverage | 1.4% | 3.0% | Food Manufacturing’s “2023 Digital Guide to the Food and Beverage Industry” |
| Industrial Equipment | 1.1% | 2.3% | Industrial Equipment News’ 2023 Guide to Digitalizing the Industrial Equipment Supply Chain |
| Mechanical and electrical equipment agency distribution | 1.5% | 2.8% | Agent Channel’s “2023 Digital Guide to Mechanical and Electrical Equipment Agency Distribution” |
| Trade import and export services | 1.0% | 2.0% | International Trade Magazine’s “2023 Digital Guide to Global Trade Services” |
| Third-Party Logistics Services | 1.2% | 2.3% | Supply Chain Management Review’s 2023 Digital Guide to Third-Party Logistics |
| Information Technology Solutions | 1.3% | 2.8% | CIO Review’s 2023 Information Technology Solutions Provider’s Guide to Digitalization |
| Equipment Manufacturing | 1.2% | 2.3% | Equipment Manufacturing Magazine “2023 Digital Guide to Equipment Manufacturing” |
| Apparel and Textile | 1.1% | 2.5% | Apparel Magazine “2023 Global Apparel Manufacturing Digitalization Insights Report” |
| Furniture | 1.3% | 2.8% | Furniture Today “2023 Digital Guide to the North American Furniture Manufacturing Industry” |
| Teaching instruments and equipment | 1.0% | 2.2% | EDTECH Magazine “2023 Digital Guide to Teaching Equipment Manufacturing” |
| Glass Manufacturing | 1.1% | 2.5% | Glass Magazine “2023 Digital Guide to the Glass Industry” |
The following is how Statusbrew tracks the return on investment of organic rankings and paid listings on Facebook.
The difference and connection between organic ranking and paid listing
To systematically understand the intrinsic relationship between the two search engine rankings, we can analyze it from the following four dimensions:
1. Different ways to obtain rankings
From the perspective of acquisition methods, organic ranking and paid listing are just as their names suggest.
Organic ranking means that companies actively increase traffic through search engine algorithms through continuous publishing of valuable content, technical optimization and external link building. Businesses invest time and effort, and search engines reward them with free traffic. The process of organic ranking is similar to farming and requires cultivation and accumulation.
Paid listing means that companies directly purchase traffic services. Due to commercial considerations, search engines will display corporate advertisements and content higher in the search results. Paid listings are transactional in nature, and companies directly invest funds in exchange for traffic.
2. Achieve goals differently
From the perspective of corporate goals, generally speaking, organic ranking focuses more on brand building and customer retention; paid listing focuses more on direct result conversion.
Organic ranking requires building brand influence and authority through high-quality content. This is a long-term work, the purpose is to close the connection with users, gain lasting attention, and ultimately complete the goals of brand building, customer education and conversion. In the eyes of users, a company changes from unfamiliarity to familiarity, and from trust to loyalty. This is a gradual and deepening process.
In contrast, paid listings more directly target the target audience, use concise advertising language to attract attention, and guide potential customers to click and convert quickly. Such conversions are often short-term and directly related to corporate sales performance. When users click on paid ads, they often have clear purchase intentions or are more interested in certain content. At this time, powerful advertising language can quickly stimulate action.
We can make an analogy: organic ranking is like slowly building trust with consumers, while paid listing is directly promoting products. The latter is more efficient, but the former has stronger customer stickiness. Companies need to adopt different strategies depending on actual needs.
3. Coverage varies
From the perspective of coverage, organic ranking can usually help companies cover more different types of keywords; while paid listing can more accurately locate popular keywords.
The wider the content distribution of the website and the stronger the link network, the more relevant long-tail keywords can be covered. This brings stable and continuously growing low-cost traffic to the enterprise. The search volume of such keywords alone is not high, but the total volume combined is huge. Aggregating these scattered traffic through organic ranking is an important part of search engine marketing strategy.
Paid listing can place popular head keywords more quickly. This type of keyword has a large search volume and fierce competition, but the conversion rate is also relatively high. Through payment, companies can quickly enter competitors’ positions and demonstrate brand strength. Compared with content construction, this is a more direct and powerful path.
For example, searching for the keyword “bread cake” requires competing with many bakeries; but long-tail keywords such as “company anniversary bread cake” are relatively easy. Companies can combine organic rankings and paid listings to occupy multiple strategic heights.
4. User stickiness accumulation is different
From the perspective of maintaining customer relationships, organic rankings are easier to establish long-term stickiness. Because users are attracted by the value of the content, this attraction can last for a long time; while the traffic from paid listings is relatively short-term, and it is difficult to continue to obtain it without the promotion chain.
When users learn about a brand through organic rankings, they are likely to become loyal users if the content is of high quality. This comes from the organic combination of content and products. Users cannot distinguish between the value of the content and the product itself, and the two become one. This will greatly increase repurchase rates and customer stickiness.
The internal motivations of users acquired through paid listings may be more single-minded and short-sighted. Once the promotion ends, they may go to other brands. User loyalty is not easy to build through simple promotional words and requires longer interactions.
Therefore, in the long run, organic ranking can help companies build solid consumer relationships, which is the cornerstone of commercial value; while the contribution of paid listing to the company’s overall brand value remains to be discussed.
Strategies for combining organic ranking with paid listing
It can be seen from the above comparison that organic ranking and paid listing have their own advantages. Smart companies should not make one-sided choices, but need to clarify their short-term and long-term goals and organically combine the two as part of the overall search engine marketing strategy.
1. Based on organic ranking and supplemented by paid listing
Organic ranking is the cornerstone of search engine marketing. Enterprises need to continuously build high-quality content and continuously improve the authority of the website. At the same time, you can purchase traffic appropriately for some keywords and take advantage of the immediate effect brought by paid listings.
As time goes by, the content accumulation effect of organic ranking will become more and more obvious, and bring free traffic to more related keywords. At this time, the investment in paid listings can be gradually reduced and turned into additional auxiliary functions such as key promotions.
2. Develop short-term and fast strategies in stages
According to the different development stages of the enterprise, different search engine marketing strategies can be adopted to achieve short and fast results.
During the market opening period and rapid growth period, you can increase investment in paid listings, quickly occupy the traffic window, and open up visibility and sales; after the stable period, you should gradually shift to organic ranking accumulation, win user trust through content output, and jointly promote sales. Sale.
As time goes by, the sales contribution brought by natural traffic will become larger and larger. At this time, paid listings can take a back seat and focus on supplementing key promotions.
3. Both go hand in hand to cover keywords
Ideally, companies should conduct both organic ranking and paid listing at the same time, and maintain stable investment. Organic ranking can cover a large number of long-tail words; paid listing ensures continuous traffic of head keywords. The two complement each other and jointly form the cornerstone of the search engine marketing system.
Over time, as the content system becomes more and more complete, long-tail words will continue to be upgraded to short-tail words and head words, and the organic ranking range will automatically expand. At this time, the investment in paid listings can be appropriately reduced to continue to ensure the traffic of key promotions.
Conclusion
Search engines bring a huge and direct customer base to enterprises, which is both an opportunity and a challenge. To stand out in the digital competition, companies must understand the inherent connection between organic ranking and paid listing, and organically combine the two as part of the overall digital marketing strategy.
Organic ranking is the only way to build a brand and acquire long-term customers. Paid listing can help quickly open the market and directly achieve sales. Clarifying short-term and fast goals and adapting to the characteristics of the company’s development stage are the keys to effective use of both. Only by achieving this can the traffic dividend of search engines be maximized and become a solid foundation for enterprise market expansion.