BUSI 436 Week 5 Research Paper 2 Example

Paid and Organic Search Together: How a Small Online Retailer Should Approach Search Marketing

Introduction

When a customer types "loose leaf green tea" into a search engine, two kinds of results appear: sponsored listings, which advertisers pay for when someone clicks, and organic listings, which the search engine ranks by relevance and quality. Roberts and Zahay (2018) describe search marketing as one of the most important Internet marketing tools because it meets buyers exactly when they are hunting for a product. A small retailer with a limited budget faces a practical question: should it pay for search ads, invest in the content and site improvements that raise organic rankings, or both, and if it pays, how high in the paid results should it aim? This paper argues that the two work best together and that the top paid position is often not the most profitable one.

Organic and Paid Search: Substitutes or Partners?

Many small business owners assume that paid and organic search are substitutes: if the business already ranks well organically, paying for an ad on the same search wastes money, and if it pays for ads, it need not invest in organic rankings. Research suggests a different picture. Yang and Ghose (2010) studied search data from a nationwide retailer and examined how its organic and sponsored listings affected each other. They found a positive interdependence: when the retailer appeared in both organic and paid results for a keyword, the click-through rate on each was higher than when it appeared in only one, and clicks on one type of listing were associated with more clicks on the other.

One interpretation is that appearing twice on the same page signals relevance and credibility, and gives the searcher two chances to notice the brand. A small retailer that ranks organically and also advertises on its most important keywords is not paying twice for the same customer; it is doubling its claim on the searcher's attention. The finding does not mean every keyword deserves both; for a retailer's own brand name, for example, other research has found that paid ads add little because searchers were already looking for the brand. The finding applies most strongly to category searches, where shoppers have not yet chosen a seller.

How High to Bid

A second decision is how much to bid, since higher bids generally win higher positions. It seems obvious that the top position is best, since it gets the most clicks. Agarwal et al. (2011) tested that assumption using data from a large advertiser and found that while click-through rates did fall with lower positions, conversion rates did not fall in the same way, and in some cases lower positions converted as well or better. Because the top position also costs more per click, the most profitable position was often not the top one. People who look past the first ad to a lower one may be comparing carefully, and such careful shoppers often buy once they click.

For a small business, this research argues for testing positions rather than paying for the top slot by default. The goal is profit per click, not clicks.

Measuring Search Results Correctly

Search marketing tempts businesses to measure the wrong things. Search platforms report impressions, clicks and click-through rates, which are easy to watch but do not show whether the business made money. A small retailer should measure cost per order and, ideally, the value of the customers each keyword brings, since a keyword that attracts repeat buyers is worth more than one that attracts one-time bargain hunters. The research reviewed here also suggests measuring organic and paid results together rather than separately: if paid ads on a category keyword raise organic click-through as well, judging the ads only by their own clicks would understate their value. One practical approach is to run paid search on a keyword for a month, pause it for a month, and compare total orders from that search term across both periods. That simple test captures the combined effect the research describes.

Building Organic Visibility on a Small Budget

Organic search requires effort more than money. For a specialty retailer, the most valuable organic content answers the questions customers actually type: how to brew a particular tea, what makes one oolong different from another, which teas have less caffeine. Each answer, written by someone with real expertise and placed on a page that also sells the tea, can rank for many related searches over time and keeps working after it is published, unlike a paid ad that stops when the budget runs out. Local visibility matters as well, since many searches for gifts or specialty food include a location or are made on phones near the shop. Keeping map listings complete, accurate and full of recent reviews costs little and can bring customers who would never have found a small business through paid ads alone. Over time, strong organic visibility lowers the amount a business must spend on paid search to stay visible, which is why organic investment comes first in the plan.

Application: Harbor Leaf Tea Company

The composite tea seller used throughout the course has a modest search budget and serves three groups: enthusiasts, holiday gift buyers and occasional drinkers who choose tea for wellness. Applying the research, it would invest first in organic search by publishing brewing guides and tasting notes for its most searched teas and by making its local listings complete, since many gift buyers search on phones for nearby options. It would then run paid search on category keywords where it already ranks reasonably well organically, such as "oolong tea online" and "tea gift set," to gain the reinforcing effect Yang and Ghose found. It would not bid on its own brand name, and it would test second and third positions against the first for a month, comparing cost per order rather than clicks. Finally, it would track which keywords lead to repeat purchases, since an enthusiast found through a rare-tea search is worth more over time than a one-time gift buyer. During the holiday season, when gift searches rise sharply, the company would shift more of its paid budget to gift keywords and to mobile ads near its shops, then return to its normal mix in January. A simple calendar of search priorities by season, reviewed monthly, would keep the small budget aimed at the searches most likely to produce orders at each time of year, and the owners would compare each season's results with the previous year's to refine the next plan.

The textbook stresses that search marketing must connect to the site's experience. A searcher who clicks an ad for "jasmine pearls" should land on the jasmine pearls page with tasting notes and reviews, not on the home page, so that the promise of the ad is kept immediately.

Common Mistakes in Small Business Search Marketing

Several mistakes recur among small businesses new to search. The first is bidding on broad keywords, such as "tea," that attract many searchers with little intent to buy from a specialty seller; specific phrases, such as a tea's name or "loose leaf tea gift set," cost less per click and convert better. The second is sending every ad to the home page, which forces the visitor to search again and loses many of them. The third is ignoring negative keywords, terms that tell the platform not to show the ad, such as "free" or "recipe" for a seller of tea, so the budget is spent on people who were never going to buy. The fourth is setting the campaign and leaving it, when search costs, competitors and customer behavior change by season. A small business can avoid all four with a short monthly review of its search terms report, keeping keywords that produce orders and cutting those that do not. These are simple disciplines, but they often decide whether search advertising pays for itself.

A Biblical Perspective: Stewardship and Honest Claims

Search budgets are small for most businesses, and every dollar spent on a click that does not convert is a dollar unavailable for wages, inventory or service. Jesus said that a servant trusted with small sums who handles them well proves trustworthy with large ones (English Standard Version Bible, 2001/2016, Luke 16:10). Careful testing of keywords and positions, rather than bidding for prominence out of pride, is a form of that faithfulness. Search advertising also tempts sellers to write ad copy that promises more than the landing page delivers. Proverbs sets dishonest scales, which God hates, against honest weights, which please Him (English Standard Version Bible, 2001/2016, Proverbs 11:1), and an ad that misleads a searcher is a false scale in digital form. Honest ads that match the page also perform better, because disappointed visitors leave without buying.

Conclusion

Paid and organic search are partners, not rivals. That is the central finding of this paper, and it reverses a common assumption among small business owners. Research shows that appearing in both reinforces each, and that the most profitable paid position is often below the top. A small retailer should build organic visibility through useful content and complete local listings, advertise on the category keywords that matter most, avoid paying for its own brand name, test positions and measure profit per order. Combined with honest ad copy and careful use of a limited budget, this approach turns search from an expense into a disciplined source of customers, and it supplies the search portion of the tea seller's completed plan in Week 8.

References

Agarwal, A., Hosanagar, K., & Smith, M. D. (2011). Location, location, location: An analysis of profitability of position in online advertising markets. Journal of Marketing Research, 48(6), 1057-1073. https://doi.org/10.1509/jmr.08.0468

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

Roberts, M. L., & Zahay, D. (2018). Internet marketing: Integrating online and offline strategies (4th ed.). Cengage Learning.

Yang, S., & Ghose, A. (2010). Analyzing the relationship between organic and sponsored search advertising: Positive, negative, or zero interdependence? Marketing Science, 29(4), 602-623. https://doi.org/10.1287/mksc.1090.0552