The Break Up: End Your Love Affair With Organic Traffic!
The Break Up: End Your Love Affair With Organic Traffic!

Organic traffic isn’t necessarily worth more than paid traffic

After several years in the industry of buying and selling websites, and in my current position running a website due diligence agency, I tend to speak to website owners with various levels of knowledge and experience.

This article aims to break a widespread myth that sites getting organic traffic from search engines are more valuable than those getting traffic from Pay per Click or Display Ads. A large number of webmasters and buyers alike, even experienced ones, tend to severely over-estimate the value of organic traffic, as opposed to that of paid traffic.

To a degree, it’s understandable. I’ve even seen several self-proclaimed ‘experts’ go as far as suggesting first time website buyers to stay away from any sites that rely on paid traffic and only deal with those that receive “natural” organic traffic from search engines.

From the last 50 or so website acquisitions that I’ve overseen either as a broker or as a due diligence consultant, the sites that had over 70% of their traffic originating from Google sold, on average, for a multiple 37% higher than those that relied mostly on paid traffic. In other words, buyers are still willing to pay a premium for sites that get organic traffic.

We’ll look at some of the main reasons why in reality organic traffic is far less valuable and more risky than its paid counterpart.

1. Overall Instability and Risk

Not many site owners realise that there’s an extremely high degree of risk and instability associated with search traffic.

Even sites that have had stable rankings for years can have their traffic disappear overnight as a result of a small change in the search engine’s algorithms (and if that engine happens to be Google, those changes can happen often!). Contrary to popular belief, this is a risk not just for sites that utilise unorthodox or blackhat SEO tactics but also for the perfectly legitimate ones.

Having a quick look around webmaster forums at the time of a major Google update will give you a good idea of the seriousness of the situation. Every update leaves hundreds of thousands of website owners puzzled as to why the rankings of their once-so-popular websites have diminished overnight.

With paid traffic however, none of these risks are present.

2. Due Diligence Burden

Needless to say, websites that have been aggressively “SEO-ed”, and especially those that have used “black hat” SEO tactics, are at an even greater risk of having their search rankings disappear overnight.

Changes in search rankings often take time to come into play, so when you’re buying a site it’s important to not only be careful with the SEO that you will perform on your newly acquired website yourself, but also take a close look at the SEO activities that the previous owner has performed. Often enough, illegitimate SEO strategies only backfire months (or sometimes years) later.

Because of this, the buyer’s due diligence burden is usually much higher when dealing with search traffic than it is when dealing with paid traffic. This is both because traffic characteristics need to be looked at more carefully and because it can often take extreme effort and great investigative skills to spot potential issues and illegitimate SEO tactics that have been used in the past but are likely to backfire in loss of traffic after the purchase.

As a buyer, this results in quite a lot of work, and as a seller, it’s in your interest to make your buyer’s life as easy as possible.

Naturally, this problem doesn’t really exist with paid traffic. Provided you can verify the source of the traffic, how much it costs and how well it converts, you can usually assume things will continue to go in the right direction.

3. Fighting Competition

Another important aspect to bear in mind when acquiring a site that depends overly on search traffic, is that you’re often limited when it comes to competing with other sites ranking for the same search keywords.

With paid traffic, who gets the top spot is mostly decided on which of the competing advertisers is willing to pay the higher price.

The size of your ad budget of course depends on how good you are at converting your leads into business, which ultimately depends on how good you are at running your business!

And that’s exactly how it should work. The website that is better at what they do gets more business. With search however, it’s a whole different story. If your site relies on search traffic then it’s effectively the search engine that decides whether the buyers should go to your site or your competitor’s site, and there is very little you can do about it other than more SEO (but this comes with a completely new set of risks).

4. Scaling Up

Something that many webmasters only realise once they’ve been running a site for a while is the lack of possibilities for scaling up organic traffic. Quite obviously, the only way to increase the traffic that your site gets from search  is moving up in rankings. However, this is more often than not an extremely difficult task that can result in the exact opposite if done incorrectly.

At the same time, most paid advertising campaigns can be scaled up quite easily. If you’re running Pay Per Click then you can simply increase your budget or widen your selection of keywords, and you’ll see an instant increase in traffic. With direct ad buys, you can sign more ad deals or increase the impression caps that you have in place for the existing ones and the result is similar.

Whilst it is also possible to scale up organic traffic sites by simply adding paid traffic to the equation, you need to bear in mind that when buying a site that is already getting paid traffic, you’re also buying all of the preparation and testing that has already been done. More importantly, you will then have proof that paid traffic does indeed work for this particular site.

Often times, starting to drive paid traffic later on only results in hundreds of hours and thousands of dollars spent, simply because many websites out there could never survive if they had to pay for their leads, effectively demonstrating a flawed business model where the business is only profitable if leads are provided free of charge!

5. Optimising the Conversion Process

Last but not least, search traffic provides a poor playground for split testing and experimenting to see what works or converts at a better rate.

As a split testing junkie, I find search traffic extremely difficult to work with. Not only do search engines provide no control over which part of my site clients first see, in many cases changes done as a result of a split test can have disastrous effects on the site’s search rankings in general.

What works for your leads and best turns them into clients isn’t necessarily what a search engine deems best content.

This can create a situation where you end up optimising your site’s main landing page for conversions, only to find out a couple of months down the line that the changes that you’ve made have lowered your search rankings and as a result, the number of leads that the page is meant to convert has decreased considerably.

With paid traffic, especially Pay Per Click, split testing is extremely simple and you can run several tests at the same time to keep increasing your conversion rate.

Conclusion

If you’re a buyer then it’s important to see whether the site you’re about to buy depends overly on search traffic and take it into your consideration when valuing the asset and performing due diligence.

Not only can you better analyse the risks associated with the site, but an educated buyer can also use the market’s overall ignorance to pick up high quality properties that depend mostly on paid traffic at lower multiples.

If you’re someone thinking of selling your site in the future and the site currently relies on search traffic then it’s in your best interest to start diversifying before it’s too late and add in some paid traffic components. Starting a Pay Per Click campaign is a simple and straightforward process, and the nature of PPC allows you to start experimenting even on a very tight budget.

Currently, many buyers are willing to pay a premium for sites like this but buyers are getting smarter daily and because of the reasons laid out above, this situation is likely going to change in the near future.

What about you? Do you place a higher value on organic traffic, or have you learned to love paid traffic sources?

Thanks to liquidnight for the photo!

  • Bryan, Great article. Often times it is best to use paid traffic to gather data for SEO. As you said paid traffic is fast and you can split test. Many companies I work with have the data which makes SEO and easier job.

    SEO is great and still provides great conversions but if someone is thinking about buying a website for the first time your post is great advice about paid traffic.

  • I still think that having free traffic is a very nice thing. On the other it’s true that you have more control when you pay for your traffic. It can also leave you some space for some improvements. If the paid traffic have a positive ROI for paid traffic, then maybe it is worth putting some effort in doing SEO as it could quickly increase the value of the website.

    • Bryan O’Neil

      Hi Bruno,

      Sure thing! Most of the sites I manage and have managed get at least some organic traffic and for some of them the majority of traffic is organic, so I’m not at all saying that organic traffic is entirely bad. The point I’m trying to make is that many people (falsely) believe that organic traffic is somehow *better* than paid traffic. Through my years as a website broker I saw a large number of buyers specifically say that they’re only interested in sites that get organic traffic and anything paid was a big no-no for them, clearly illustrating the issue.

      Cheers,
      Bryan

    • flipfilter

      IMO, it should be a waterfall effect, as in having a sold Paid Traffic campaign should generate the profit that you can reinvest into organic SEO and community outreach.

      I think the common problem is where people do it the other way around, taking preference to sites that are 90% organic with the mindset of establishing a paid campaign once they’ve generated some reserve capital. A site with a profitable established paid campaign ultimately means you’re in control of what that site earns to a much greater degree than with search traffic for example.

  • Julian

    I believe search traffic is still very important as it is a way of customers searching for your relative website to find you for free and drive interested visitors to your content

  • Ryan Kaufman

    hi Bryan

    You do have some interesting points here regarding free vs. paid organic traffic…

    I think it’s not just about who’s less risky, but who’s more profitable in the long term

    In order to lower risk and maximize profits, I’d say go with both… sadly, too many bloggers/marketers/affiliates/site owners aren’t used to diversifying their traffic sources, and usually use one or the other…

    I’ll keep an eye on your company

    Best!
    Ryan Kaufman
    http://www.trustedsiteseller.com

  • This is a great post. I tell people this exactly all the time. I am a SEO guy, but can’t even imagine someone buying a website based on search traffic who has no idea how it all works. Insane. But this post also got me thinking on acquiring sites differently. I am going to searching for more successful sites that have a profit just based on PPC. Great idea.

    Lately we’ve been using Facebook only to make some new sites profitable. We started this journey about a year ago when search engine rankings hit the fan due to shady link building. Diversity in site traffic is so important when building a digital asset.

    Bryan – would you say that folks even understand what a solid diversity of traffic is worth to a site? Can you value it at more? Or are people still just basing off the numbers these days?

    • Bryan O’Neil

      Hi Matthew,

      Thanks for your comments!

      >> Bryan – would you say that folks even understand what a solid diversity of traffic is worth to a site? Can you value it at more? Or are people still just basing off the numbers these days?

      I suppose it depends. People are certainly starting to get more knowledgeable in the area and I’m seeing more and more buyers looking for diversity, but at the same time there are still plenty of people out there who, like you say, just look at the overall numbers.

      When performing DD on sites, traffic diversity (and the quality/sustainability of main traffic sources) are among the key areas that we look at, and based on our internal data I can safely say that the majority of webmasters are doing very little to diversify their traffic sources. This could be due to little experience or because of a short term exit strategy and knowing that most buyers aren’t too knowledgeable on the subject. Either way, the situation seems to be slowly getting better so in a few years time the traffic quality of an average site for sale is hopefully going to be much higher than it is today.

      Bryan

  • The One

    Organic traffic for the most important and relevant search terms will always be more valuable than paid search – because they are free.
    PPC traffic is fine but keyword analysis tools other than Google Adsense tools should be used. The Google Adsense keyword tool is fatally flawed in order to increase revenue for Google. Anyone who keeps an eye on organic rankings and can correlate the Google analytics tool, can extrapolate that the tool is biased.

  • jonhuie

    PPC can only possibly work if a website is selling something expensive — and that describes only a small fraction of websites — and a tiny fraction of quality websites.

    Moreover – a website without organic traffic is worthless. The business behind the website may have value, but not the website itself.

    • Bryan O’Neil

      I suppose the shift comes largely with price range. When dealing with low-end properties (say sub-$5k) then what you’ve said may be true, however once you start moving higher, you’ll notice that there are less “empty sites” (you know, the type of sites that have a ton of content and make their money with CPC ads) and more sites that can be considered actual businesses.

      These sites typically sell something (e-commerce, SaaS, other models) or offer something on a community-model. In both cases, organic traffic is not at all crucial and the lack of it most certainly doesn’t make the site “worthless”. Quite the contrary, actually – in cases of e-commerce, a site that isn’t able to show profit after spending on advertising can’t be considered sustainable. It’s like having a shop that depends solely on tourist traffic brought by one tourist agency to a nearby place of interest. A successful business needs to have a margin that is capable of supporting advertising.

      Bryan

  • Robert

    Hear, hear!

    Keep matters in your own hands.

  • Bryan O’Neil

    Thanks for your comment, Ryan!

    I fully agree. It’s never a good idea to keep all your eggs in one basket so diversification is always a good thing.

    Cheers,
    Bryan

  • keith

    social is #1, organic and paid are way behind social. get with the times people

    • Bryan O’Neil

      I can’t really agree with you here at all.

      Whilst I’m not saying social media isn’t important in today’s climate (especially for building relationships with your clients), social media as a traffic source is, in my opinion, grossly over-rated.

      I recently came across a good study on how much of the web’s traffic really originates from social media but I can’t seem to be able to find it now. Here’s another one that may be interesting, though: http://searchenginewatch.com/article/2257044/Can-We-Please-Stop-Hyping-Social-as-the-Marketing-Messiah

      Another issue with social media (and possibly why some people believe in it so strongly) is that even though social media platforms do deliver a lot of clicks, the majority of those clicks are “interest” clicks, rather than buying clicks. This is obviously skewing the overall numbers and having webmasters believe that social is capable of driving tons of traffic, whilst most of them don’t realise that the massive traffic potential is only there if your site shares cute kitten photos, but not if it sells air conditioning units.

      Again, I do believe in the importance of social media and am active on all main social media channels, but I utilise social media as a relationship builder, rather than a traffic generator.

      Bryan

  • Christopher Lee Van Buren

    Excellent! I agree with all your points and like how you laid everything out so well. In my webinar “Real Marketers Don’t Do SEO” I mention some of your points — and lead to a similar conclusion, that paid traffic strategies can be more effective long-term than SEO. Thanks for the article!

  • tiroberts

    Extremely interesting piece, Bryan; and I must say I 100% agree with you. I admit, I used to be a raving fan of SEO and organic traffic. However, as time went on, I began to realize how freaking unreliable it is, what with all of Google’s random algo updates, so I just 86’d it all together.

    I’m much more partial to social traffic and building up audience driven traffic via tapping into other influencers communities. Driving traffic that way can take some time as well; however, it’s much more feasible in my book and the traffic is much more engaged, interactive and will yield higher conversion. At least for me it does.

    I also love paid traffic. The speed is great and the predictability is even better. Plus, once you’ve gotten an well converting sales funnel in place, scaling up with paid traffic is a piece of cake.

    I like integrating both paid and social traffic. They work well together and feed off of each other.

    This is my first time visiting the Flippa blog and I’m loving what I’ve read and seen so far, Bryan.. I’ll be sure to share this piece with my social circle. I’ll also comment and share it with the BizSugar community.

    Keep the great content coming and I look forward to connecting with you more soon.

    Ti

  • How

    Problem is that with PPC you have to get conversion rate very high and shoppers are getting smarter…

  • Kai

    Its Googles intention to force merchants into needing sponsored ads in order to compete. It’s pretty evident, you just have to search for (ex nike shoes) and you’ll see that up to 8o% of the above the fold is occupied by sponsored ad texts and product listing ads.

    I suppose the real question is! Are the sponsored ads, especially Product listing Ads sucking all the commercial intent away from the Organic results. Truly the top ranked merchants on organic are only receiving traffic of customers who are at the top of their buying funnel (meaning they are still researching) which we all know are much less likely to convert to a sale. Due to the content rich nature of product listing ads, they naturally steel away the customers who already know what they want and simply want to go through to a product page and make a purchase, especially because those ads now dominate the above the fold real estate.