Pay per click advertising has become a completely integrated part of
search engines, and many website owners fail to see the value in either
natural traffic or PPC traffic.
A while back I found a table that compared the click through rates of
Natural and PPC search traffic. I cant seem to find the original source
any more, so my apologies for not citing the source of this
information, although it was a reputable source.
I have placed the data from that table into an easy to follow graphic model of a common search engine result page.
To put it simply, if you are only marketing to the natural search or the PPC search environment, you are loosing out on a huge potential percentage of visitors. Most search marketers will agree that a marketing campaign should be split between natural search marketing, PPC marketing, and other mediums of advertising on the Internet. Even if you have a #1 ranking for a search phrase, you could be loosing 50% or more of your potential customers to those that click on PPC listings.
Obviously this data may not be appropriate for every situation, such as non-commercial sites, sites that have no budget and by some miraculous event have top search engine ranking, or sites that rank high naturally but have ridiculously high PPC competition and cost per clicks.
Otherwise, I think it is almost always best to spread out a marketing budget. Work some on a long term SEO campaign for natural rankings, and work some with a short term PPC campaign. Having success in both PPC and natural search areas can make the difference between an ecommerce website, and a very successful ecommerce website.
A word of caution about the #1 PPC spot.
In my experience the #1 spot on any high traffic PPC listing will get you a large bill and a lot of worthless clicks. If you do decide you want this spot and you’re advertising for high cost per click and / or high volume search phrases, you should track your campaign very carefully to ensure you get a positive return from it. I have seen companies burn through tens of thousands of dollars in a few days without anything to show from it, by going for the #1 spot on a high traffic broad search phrase.