Are you devoting resources to Search Engine Optimization?

About 80 percent of internet users make search engines as their first tool to search what they are looking for. Effective online strategy would be to grab the user at the point of entry, that is, search engines. Businesses are doing all they can to harness the benefits of search engines. Unfortunately, most search engine marketing managers tend to overlook the importance and effectiveness of natural search engine optimization. According to recently released research from SEMPO, the bulk of search engine marketing (SEM) spending goes to paid placement ads. About 83% of the online marketing budget last year (2004) was spent on the paid placement and it is projected to reach up to 85% this year (2005). In contrast, less than 10% of SEM spending is devoted to boosting organic search placement through SEO efforts or paid inclusion.

However, if you look at the preferences and trust level of the search engine users, it appears that paid search ads might not be the most effective form of search engine marketing (SEM).Surveys and research by major marketing research companies show that the current spending pattern might not be the most effective way for marketers to make money off search. In fact, assuming a static SEM budget, spending more to create higher natural search results and somewhat less for paid search advertising can obtain better conversion results—especially when you factor in the behavior and attitudes of search engine users.

Another factor to be considered while projecting your future paid listings budget is the rising average cost of buying keywords. With more and more advertisers entering the paid search arena, and users increasingly clicking on paid search ads, the rising cost for keywords contributes greatly to spending growth. According to Jupiter Research, the average price per click for paid search will rise from 36 cents in 2004 to 47 cents in 2009. Most of the search engine marketing experts agree that with rising paid keyword prices, it's going to be incumbent on the advertisers to buy keywords more efficiently and explore more cost effective ways like organic search engine optimization to drive traffic to their sites.

Organic search engine optimization (SEO) of the website makes a lot of sense while exploring the possibilities of getting constant quality traffic. While SEO is often misunderstood as some sort of spam trick, SEO works over time to increase a company's organic listing rankings for appropriate keywords and can give the most impressive ROI in the longer run.

Natural listings are also more likely to attract users and get clicks than paid search ads. Survey done by Enquiro in April 2004 shows that 66.3% of search engine users say that they click on organic listings in the search engine result pages (SERPs) before clicking to sponsored link. Only 23.1% of respondents choose to click on any type of sponsored link before an organic one.

The factors that the organic search engine listings are more relevant and most users trust that the information is unbiased, add up to generate more click through ratio from the searchers. And simply because organic search listings are not advertising, six out of 10 Internet users deem such results most relevant, according survey by iProspect. This proves that no matter how the results are presented, US Internet users perceive organic search results as more relevant than paid search advertisements. The more experienced the user, for instance, the more likely he or she will choose organic over paid search listings. Research further reveals that more than 70 percent of search engine users are aware of the difference between natural and paid listings.

Marketers who allocate a part of their paid search budgets toward SEO efforts will tend to get higher conversion rates, since users tend to prefer organic listings over advertising. More and more bigger companies are realizing the potential of organic search engine optimization (“We realized to have a long-term play; we had to have an SEO campaign.” — Les Kruger, SeniorOnline Marketing Manager,AT&T Wireless;CMO Magazine,December 2004, eMarketer report)

If you are one of the SEM managers, currently neglecting the importance of organic search engine placements, this is the time to start taking the organic search seriously. Organic search engine optimization can provide the most bang for your buck.