Does PPC Cannibalize SEO? Not Likely In The Real World
Gary Angel, CEO of SEMPhonic wrote a great article on the interplay of organic and paid search listings the other day for iMediaConnection, and Marshall Sponder of WebMetricsGuru had an equally good review of Gary's article; I highly recommend you take the time to read Marshall's article, and then Gary's if you feel like it.
Taking data from one of his F1000 advertiser's PPC and SEO campaigns, Gary infers that
"if your SEM provider isn't accounting for organic cannibalization and you have a significant natural presence, then chances are they are seriously mis-optimizing your campaign. Indeed, it seems likely that the worst possible scenario would be to use an automated PPC management tool that isn't taking account of organic cannibalization. Such a system would be particularly efficient at steering dollars into terms whose apparent (but not real) incremental cost is artificially lowered by organic cannibalization."
At first pass, I think many in the search industry would look at his data and agree with him. But in my opinion, however, a couple points are worth considering:
1)Unless I misread Gary's article, the data is mainly for brand keywords. And unless your PPC/SEO campaigns exist only to ensure people find you who don't know the difference between the browser address bar and a search engine, then a study of this type must consider more than just brand keywords to have any relevance.
2)Most advertisers I know have thousands to tens of thousands of keywords in their paid search campaigns, with average bid positions of ~5.0 and average organic rankings of ~15. In that more real scenario, I'll bet two dollars to your penny that the cannibalization Gary speaks of is less like 20-50% and more like <2%.
3)Paid search traffic varies to a much lesser extent than organic traffic, as victims of Florida, Allegra, Bourbon and other SERP updates can attest. Yet, advertisers' traffic and ROI needs tend to move in one direction - up and to the right. In a world where advertisers' marketing goals are set by...themselves, I have yet to meet the advertiser who cares more about avoiding unnecessary cost than achieving his/her goals in a predictable fashion.