• by Laurie Sullivan  @lauriesullivan, November 4, 2008

Sloppy SEO and SEM strategies are having a negative impact on people searching for information on Google, Yahoo and MSN, according to a report released Tuesday from Conductor that analyzes paid and organic search strategies of Fortune 500 companies.

The study--the first of its kind from New York-based Conductor--set out to determine whether investments in paid search terms made by Fortune 500 companies, such as AT&T, Verizon and Wal-Mart Stores, align with searches of content on sites. Given the vast resources dedicated to competing in paid search, the study reveals that many Fortune 500 companies are ineffective when it comes to leveraging their brands in organic search.

Although experts agree that 80% of clicks come from organic search, large corporations are typically the worst offenders at choosing and organizing keywords on sites. That explains why the study also reveals that more than 70% of Fortune 500 companies don't rank high in organic search queries. "It's alarming," said Seth Besmertnik, CEO at Conductor, which provides organic search solutions. "Many times when you search you're finding everything but the brand. Not only is that a problem and big opportunity for marketers, but a big gap the Internet community needs to repair."

The findings suggest a disconnect between paid and organic search strategies. Only 8% of consumer-facing brands demonstrated a medium-to-strong presence for the keywords they buy. Conductor determined the ranking by analyzing the top 10 keywords in paid search campaigns and assigning scores depending on where they appeared in search results.

That's about 2.4 million keywords across the companies studied, which make up a "significant portion" of the nearly $8 billion in paid search, according to Seth Dotterer, Conductor's director of marketing. "This is a large chunk of change, so having few that's visible on the natural search side is a little shocking," he said.

Some industries had no visibility, according to the study. Utilities and wholesale trade companies had paid campaigns, but that was as far as they had gone. Dotterer said some retailers were the exceptions to low performance scores.

While companies can't buy their way into the No. 1 spot on Google, Yahoo and MSN search results, they can make improvements and control factors driving queries such as content, keywords, title tags, the content management system, and links to the site.

Despite the majority of clicks occurring from paid listings, only 11% of search marketing budgets are devoted to organic search, according to Forrester Research. This is due to the complexity of determining ROI, the difficulty in shaping causal relationships between SEO efforts and traffic, and unlimited paid search inventory.

SEO experts believe it's not about tricking the search engine--but rather, organizing content on the site consistent with how Google, Yahoo and MSN want to see information.

From the study, Conductor pegged several companies as "early adopters," including Starwood Hotels and Resorts, UnitedHealth Group, Ryder Systems, Nationwide, US Airways, Cisco Systems, Microsoft, and Gap.