The Blog on Branding

Paid Search Traffic Decrease: What’s going on?

A recent report by Hitwise (an Internet traffic monitor that collects data directly from ISP networks) recently conducted a report that highlights paid search traffic is down 26% over the past 4 weeks. What does this data really mean? Is the economy to blame? Most would assume this decrease to have a clear correlation with the current recession, but there could be another reason…

“Are people filling their piggy banks instead?”

Times are Tough

The current economic recession may indeed explain the significant decrease in paid search traffic since companies are forced to cut their spending on search marketing. Heather Hopkins, senior online analyst at Hitwise sure thinks so.

She explains:

“Referrals from search engines continue to climb but the proportion of clicks going to sponsored or paid listings is decreasing. This is no doubt a result of cutbacks in marketing spend (sic) due to the recession.”

While the economic situation is partly to blame, other reasons are surfacing as to why this significant decrease is occurring and will potentially continue to occur. Times are tough (we all know), but that’s only one possible reason to explain the decrease in paid search traffic.

Already on Top

Why spend money if you are already #1? It seems like a rather stupid question to ask. Perhaps though, this is the real reason for the decreases in paid search traffic that have been noted over the past 4 weeks.

Companies like Orbitz and Walmart do not need to spend a ton of money on paid advertising when they are already #1. It is quite possible that these types of companies have figured out it is not necessary to spend as much on paid advertising when they are #1 in the organic results. Hitwise also agrees with this possible reason. When a company is already a high search term, spending is cut back on. Allocating funds to more vital and significant company needs is a higher priority than paid advertising.

In addition, many companies have been shifting their budgets away from search engine marketing and toward email and social media marketing. The new forms of online marketing available today are taking over past, more expensive ways to advertise.

SEO More Popular

Could the increasing popularity of SEO be yet another reason for the decline in paid search traffic? It sure seems that way. In fact, Hopkins noted that the decrease is “at the expense of organic traffic.”

While an obvious decline in paid search traffic is occurring, the number of people using search engines is not declining. Therefore, it can be concluded that more people are likely clicking on results from companies that use search engine optimization (SEO).

“People are most likely to click the first few results in their search.”



This decline does not appear to be stopping anytime soon either. It appears to be a continual change as more and more companies discard pay per click strategies for more cost effective choices like SEO. A survey last month from Internet Retailer found that 55.3 percent of respondents reported plans to increase search engine optimization (SEO) spending while only 24.2 percent plan to increase their spending on paid search.

So…What’s going on?

Well of course the economy is affecting paid search traffic decreases to some extent, but that is only partly to blame. What’s really going on is more cost effective solutions for marketing are taking over and becoming increasingly popular. As these new forms of advertising continue to improve and draw in more consumers, paid marketing efforts will not only continue to decrease, but may cease to exist.

Amanda Wilczynski Want content written for your Brand that shows up #1 on Search Engines and brings you new customers? Contact us.