Here’s a question that comes up frequently these days, either on discussion lists or directly from clients:

If paid listings through Overture, Google, and other PPC programs result in top rankings on major search engines, why bother to optimize your site for search engines?

It’s a good question, and the answer is equally compelling. There are many reasons why search engine marketing (SEM) is necessary and remains a top marketing strategy that gives you an excellent ROI. While it’s true that paid listings will put you at the top of many major search engines, these links are usually labeled as “ads” and are separated from the “free” listings. Users know this, and many will ignore the paid listings.

Do Paid Links Dominate? Quite the contrary, it’s the free links that dominate. According to a recent estimate based on 3 top search portals by Danny Sullivan of Search Engine Watch , sponsored listings accounted for 17 percent of the links on result pages; whereas, a whopping 71percent were free listings.

Are Paid Links Tainted? You tell me. Most people still hesitate to click on paid listings. Some will ignore them altogether. The search engines know this, and that’s why they’re loath to make it obvious that the top listings are paid ads.

This is why Commercial Alert filed a complaint with the FTC last year against 8 major search engines. The consumer advocate group thought these engines were deceiving the public by failing to label some search results as paid ads and also by confusing the public with various different labels like “sponsored listings,” “featured listings,” “partner listings,” and so forth.

The status of that complaint is still being investigated. In the meantime, many search engines have started to identify their paid links more clearly. Yet there has been no attempt to label paid listings uniformly.

Andrew Goodman, in an excellent report on how to maximize your ads with Google Ad Words Select, suggested that the reason both Overture and Google are implementing stricter editorial rules for text ads is because they want the listings to look like regular listings and not like ads! Making the ads look more like regular listings would induce more people to click on the paid listings, which get fewer clicks. I wouldn’t be a bit surprised if that’s true because most people prefer untainted search results versus ads when gathering information.

Creating Your PPC Listings It takes time, effort, knowledge, and special skills to manage PPC campaigns and create good text ads for these listings.

You must manage your PPC campaigns to ensure you aren’t over-bidding and are getting a good ROI for your marketing dollar. There are reports, software programs, and services you can purchase to help you manage your campaigns.

It takes good writing and editing skills to create the kind of Overture and Google ads that are accepted by editors and also bring a good return. Again, reports and services are available for purchase.

Optimizing Your Site for Search Engines There is much to gain by optimizing your site correctly for search engines because of all the qualified traffic you can convert. Of course your site has to be designed to close the sale in order to get those conversions. For those who want a well balanced SEM campaign:
Get listed in directories first, starting with the Open Directory Project. This will start to seed the robot engines for you.

Optimize your site for free listings by using keyword analysis and relevant content in your pages and HTML tags.

Submit manually, following the guidelines for each engine on the number of pages allowed and the frequency of submissions permitted (after verifying your listings).

Use paid inclusion programs to see your listings appear sooner and to get your site indexed more often.

Get a Yahoo! Business Express listing – a must for every serious business.

Supplement your campaign with PPC programs like Overture and Google Ad Words Select early on with a substantial initial investment, gradually reducing your PPC program as free listings begin to eliminate the need for paid listings.

Does it Pay to Optimize? Search engine optimization is one of the most cost-effective marketing strategies around. It’s well known to drive qualified traffic. When compared to banner ads, email marketing, and direct mail, it was found to drive conversion rates up while lowering cost-per-click and cost-per-acquisition. So take advantage of all those free listings as long as they’re still around.