A recent article on Skift quotes Priceline.com CEO Paul Hennessy as stating “And so I believe it is a paid world. Google is an advertising engine and they drive paid traffic to advertisers. And I think that’s going to continue for quite some time.” The headline of the Skift article is a bit more eye-catching: Priceline.com CEO on the Death of Search Engine Optimization.
As an SEO professional, I’m not worried. I see articles like this every year. In fact, you can find articles announcing the death of SEO all the way back in 2005. Still, dismissing Mr. Hennessy’s statement out of hand would be rash. Let’s examine his argument to see if we can get something more meaningful out of it than just a headline.
The core of Mr. Hennessy’s argument rests on a couple of assumptions:
1. More users click on things toward the top of a Search Engine Results Page (or really any list of things) than on things toward the bottom of the list.
2. The top of Google Results Pages for any keyphrase that is transactional at all is dominated by ads
Addressing 1. More users click on things toward the top of a Search Engine Results Page (or really any list of things) than on things toward the bottom of the list. This assumption is generally true for any top-to-bottom list of things, but there may be more going on when users interact with a Search Engine Results Page (SERP). For example, we could find that there are sets of users who simply don’t click ads, or queries which don’t trigger ads. There are several pieces of this that we have to pull apart:
1. Volume of Paid Search clicks vs volume of Organic Search clicks
2. Whether the presence of Paid Search Ads actually diminishes Organic Search clicks
3. Transactional intent of Paid Search clicks vs Organic Search clicks
To address 1. Volume of Paid Search clicks vs volume of Organic Search clicks, we could look at the traffic to Priceline.com itself:
According to SEMRush data, Priceline is getting a good deal more Organic Search traffic than Paid Search traffic. This could be an effect of limited budgets. Let’s look at some other OTAs to insure we have a good sample of this market.
According to SEMrush data, every major OTA that we’ve looked at is getting an order of magnitude more Organic Search traffic than Paid Search traffic. This clearly answers 1. Volume of Paid Search clicks vs volume of Organic Search clicks. Organic clicks wins by a huge margin.
To address 2. Whether the presence of Paid Search Ads actually diminishes Organic Search clicks, we can look to a couple of very good studies conducted by Google, George Michie of RKG, and Craig Gaylon of Swellpath. These studies may seem dated, but nothing to date has supplanted them in the industry. All of them conclude that the level of cannibalization of Organic Search clicks from Paid Search is actually quite low. Cannibalization exists on a small scale, but it’s clear that Paid Search is actually driving incremental clicks rather than simply stealing clicks from Organic Search.=
To address 3. Transactional intent of Paid Search clicks vs Organic Search clicks, for veteran marketers there’s little question. A Paid Search campaign that is at all optimized will have a Conversion Rate 30%-70% higher than Organic Search. This is more of a function of targeting exactly the right keyphrases and geo-targets in order to capture the right users than anything to do with the layout of the Search Engine Results Page. Still, Paid Search clicks win by a huge margin in this category.
The first assumption, that more users click on things toward the top of a Search Engine Results Page (or really any list of things) than on things toward the bottom of the list, given the data above would seem to be false. The amount of Organic Traffic these OTA sites are receiving and the lack of cannibalization we see in these studies far outweighs the higher conversion rate of Paid Search traffic. I suspect that if Google stopped sending traffic to any one of these sites tomorrow, that site would be filing for bankruptcy in the very near future.
To address the second assumption; The top of Google Results Pages for any keyphrase that is transactional at all is dominated by ads:
This is true from the perspective of an Online Travel Agency (OTA). They cannot participate in the Local Pack section of the Results page without paying for an ad.
This is NOT true for a hotel, or any other kind of local business. They can participate in the Local Pack section of the Results Page without an ad. Hotels can increase their participation in the Local Packs through Local SEO.
Local Search Engine Optimization is a quickly-growing field of SEO. There is a lot that we can do to make a hotel rank more highly on Google for these kinds of keyphrases. This isn’t limited to ranking in these three packs on Google.com for these highly competitive commercial keyphrases. It also includes ranking on Google Maps and formerly included Google Hotel Finder (before it was absorbed into Maps & Google.com).
From Mr. Hennessy’s perspective as CEO of an OTA, assumption 2. The top of Google Results Pages for any keyphrase that is transactional at all is dominated by ads stands true. From the perspective of a hotel, or any other local business, this assumption is false.
Mr. Hennessy is mistaken if he believes that Organic Search traffic from Google is being outweighed by Paid Search traffic. The data for his own website proves that out. Priceline isn’t the most competitive OTA in the Organic Search field right now:
And it’s possible that Mr. Hennessy’s views are colored somewhat by his company's failure to innovate & compete in this area. The data says SEO is alive and well for OTAs, hotels & local businesses, with the burgeoning practice of Local SEO being added to the tool-belts of SEO practitioners. OTAs like Priceline can't participate in Local SEO, so they're going to have to find other areas to innovate in order to stay competitive.