With so many websites competing for attention, it’s vital for any serious online business to invest in getting visitors to its site. SEO – Search Engine Optimisation and PPC – Pay Per Click Advertising are both ways of delivering traffic to your website – and there are many online marketing agencies who will offer managed SEO or PPC to help you achieve growth in visitors and revenue. But marketing budgets are being squeezed and many business owners are wondering whether to consider cutting back on their SEO or PPC budgets to deliver most benefit to the bottom line.
So, how do SEO and PPC compare in terms of delivering revenue in the short and long-term? And how do you assess whether spending budget on SEO or PPC is right for your website at any particular point?
At iMarketing, we specialise in long-term, sustainable SEO techniques which have been proven to deliver search engine rankings, substantial increases in visitor numbers and growth in revenues for our clients. While we recognise the value of a properly managed PPC campaign in the right circumstances, and can provide a managed PPC service to our clients, we view this primarily as a complementary activity which operates most effectively when a solid SEO foundation has been established.
In this guide, we look at what SEO and PPC have in common, and how this can affect decision-making regarding where to invest a marketing budget. Then we look at how SEO and PPC differ in terms of their short and long-term value to a business. Finally, we suggest an ideal balance between SEO and PPC investment, with specific ways of using PPC to complement an ongoing SEO strategy.
Common Factors of SEO and PPC
Both share the same ultimate purpose: to drive traffic to your website.
Increased traffic will, in general, result in an increase in sales, enquiries and brand awareness – all of which are necessary to grow a customer base and revenue.
Both use the same thing to drive traffic – keywords.
SEO targets keywords relevant to that business based on search terms that are currently being typed into search engines by internet users – these results are displayed in the centre part of the screen. PPC advertisers pay for their ad to be displayed in response to a user typing specific keywords – these ads appear above and to the right of the organic search results.
Both are carried out by website owners with the intention of achieving a return on investment (ROI).
However, it can be difficult to directly compare return on investment for SEO and PPC. ROI for SEO tends to be over the longer term, and the visitors a website receives today may be the result of spend on SEO that was made last year. By contrast, an increase in sales or signups from a PPC campaign tends to be immediate, making it far easier to assess ROI. The immediacy of PPC compared to the less immediate, longer term benefit of SEO can tempt many business owners to remove their focus from SEO and onto PPC.
Both SEO and PPC will usually fall under a company’s marketing and advertising budget.
But in fact, SEO should more properly be thought of as part of a business’ infrastructure since it involves improving the value of your online real estate. If you were ever to sell your online business, the search engine rankings you have achieved and the number of inbound links to your site will all count towards its market value. What you spent on PPC last month will not.
In short, lumping SEO and PPC together as ‘traffic generation techniques’ can lead to seeing them as equivalent in some way. In turn, this can lead to an apparent choice between investing in one or the other. But this fails to understand the differences between them and, in particular, what they actually deliver.
Differences Between SEO and PPC
While a PPC campaign has a definite beginning and end, SEO is an ongoing process which needs attention for the lifetime of the website, to a greater or lesser degree.
Initially, focus will be on getting your site ranked for a particular set of keywords. Once those rankings have been achieved by a combination of on-site optimisation techniques, the development of keyword rich articles and building relevant, high-quality links from complementary sites, it may be tempting to move focus away from SEO and look at PPC as a way to further grow traffic. However, reducing or stopping SEO in favour of PPC can be a mistake.
The effects of SEO build steadily over time as more keywords achieve search engine rankings. In addition, pages on a website can start to attract rankings as a result of the SEO work carried out on other pages. While search engines have famously changed their search algorithms several times to include or exclude certain features, two factors remain the bedrock for all search engines: how relevant a page appears to be to a specific keyword, and how many other well-ranked sites seem to agree that it is relevant. These two factors are unlikely ever to change, since they have direct relevance to an end user searching for information. Therefore, investment in achieving keyword rankings through the techniques mentioned above will continue to deliver return on investment for months and years to come.
In contrast, a PPC campaign runs for a fixed period of time, or until the assigned budget runs out. The sales or leads generated in this time represent the return on investment and can be directly measured. For most businesses, the value of a PPC campaign essentially ends the moment the ads stop being displayed. (An exception to this is where a client’s product or service is such that a single click can have a ‘lifetime value’ which could produce return for several years – see below).
In other words, while both SEO and PPC can deliver traffic to your site, the SEO traffic is sustainable, while the PPC traffic is temporary.
The Cost of Switching to PPC
On a squeezed budget, a client may feel tempted to switch investment from SEO to PPC for a few months, with the idea that SEO can be restarted in a few months time. While the client may not see any immediate fall in SEO-generated traffic in those months, there will still be some cost to this strategy.
At best, the client is missing the opportunity to build on existing rankings, perhaps by doing more link-building or by targeting new keywords. In other words, the value of their online property is not increasing as fast as it could.
At worst, the client is at risk of losing rankings. It should also be remembered that while rankings can be very effectively achieved using SEO, they can also be lost to other websites carrying out SEO. Maintaining a ranking takes considerably less effort than building it back up again after period of neglect. Even a fall from 1st place to 2nd place can translate into a significant fall in traffic. It is estimated that 1st place organic results receive 42% of clicks, while 2nd place receives approximately 12%.
If the client’s motivation for switching to PPC is to increase traffic, then neglecting the SEO activity on an existing ranking could be a high cost strategy.
But there is also evidence that PPC advertising is simply less effective at getting customers’ attention compared to SEO-generated results. Google’s own research shows that web users strongly prefer to click on organic results, often ignoring the paid results appearing at the top of the page or to the right. Organic results receive approximately 88% of all clicks – leaving just 12% distributed amongst the PPC ads on the rest of the page. It seems that users don’t trust PPC advertising and treat organic results as more likely to offer what they need. This effect has worsened over the past few years and ‘ad blindness’ is an acknowledged phenomenon within the PPC industry. This can make it harder to generate large volumes of traffic using PPC.
The Wrong Way to Use PPC
PPC has its place and can provide many benefits to online businesses – provided it is used in the right way and as a complementary activity to ongoing SEO. Before we present the ways in which PPC can be appropriately and successfully used, let’s first look at some inappropriate, but, sadly, fairly common ways of using PPC.
Because it’s ‘Quicker’ than SEO
By far the worst way to use PPC is as a substitute for SEO in the hope of achieving quicker results. However tempting it is to see immediate clicks and sales resulting from a PPC campaign, there are two strong reasons for resisting this temptation. The first is cost. A PPC campaign will eat through your company’s marketing budget much quicker than a steady SEO campaign, especially for competitive (i.e. expensive) keywords. The second reason is customer experience. An SEO-optimised website will also result in a website that your prospective customers will perceive as being informative and authoritative. A website packed with interesting and informative articles is more likely to be bookmarked and returned to later, or have pages forwarded to friends, family or business colleagues, generating further traffic and referral business. A non-optimised site which is little more than a sales page, with no additional user value, won’t be perceived as positively and is unlikely to generate referral traffic (unless it is for a completely unique product and service unavailable anywhere else).
Because it’s ‘Less Effort’ than SEO
A properly run PPC campaign requires tight testing, monitoring and tracking to ensure a return is being achieved for each targeted keyword. Too many website owners set up an ad, or a group of ads, and leave them to run without close monitoring beyond looking at how many clicks are being generated. Tracking specific keywords can reveal which keywords are profitable (are likely to convert to a sale or valid lead) and which are not, enabling business owners to intelligently focus their activity on keywords that convert.
Untargeted and unmonitored ads can still generate clicks, but clicks are worth very little (but can still cost a lot) unless they are from qualified users, i.e. users with an active interest in your product or service. Seeing lots of clicks in your Adwords account might feel as though something valuable is being achieved, but counting clicks is simply a measure of how much money you are spending.
It is also important to note that PPC campaigns do best when the landing pages they lead to are themselves well designed and optimised. Google assigns all landing pages a quality score, based on very similar criteria to those it uses to decide search engine rankings, i.e. appropriate use of keywords in meta tags and relevant page content. A low-quality score results in the advertiser having to pay more per click compared to an advertiser with a high-quality score.
So, even if your primary focus is PPC, significant effort is still required to intelligently analyse and target keywords, optimise landing pages, and monitor ad performance. Failure to put in this required effort will usually result in a lot of money spent for minimal return.
Because SEO has ‘Stopped Working’
A third unfortunate motivation for using PPC is to address a perceived ‘traffic plateau’. A traffic plateau can occur following successful SEO to increase rankings and traffic. Any good SEO company will target the easiest keywords first, in order to deliver maximum increase in traffic for their client as soon as possible – in fact, it would be wasteful not to. But as attention moves to more competitive keywords, the effort and time needed to achieve rankings and traffic for these keywords obviously increases, particularly the link-building effort. It is perhaps understandable that clients who have become accustomed to seeing steady increases in traffic may begin to feel frustrated when traffic growth seems to slow down or plateau for a period of time. Even worse, a client may feel that SEO has ‘stopped working’. At this point, PPC seems to offer the prospect of getting the graph moving upwards again – but this can only ever be a temporary solution.
A more effective strategy for addressing a traffic plateau is to refocus the SEO activity. This involves analysing the actual potential for increased traffic (based on keyword volumes) and the strength of competition (based on inbound link and PR scores for sites which currently rank for the target keywords). Where rankings are being achieved but click-throughs seem be below what should be expected, attention should be directed to what the search engine listing looks like, i.e. making sure both the heading and description are clear, relevant and enticing, which is also an SEO activity.
The Right Way to Use PPC
So, using PPC can quickly drain your budget for results which are temporary at best and worthless at worst. But there are times when using PPC is an effective use of budget.
When Profits Reliably Exceed Costs
The most obvious way to use PPC is when you can directly link PPC costs to resulting sales and demonstrate a profit. This is most likely to be the case if you have a high-value, high-converting product, where the sales generated easily outweigh the cost of the clicks. It may also be a good use of PPC even if the sale value does not create a profit, but the customer is highly likely to take up additional offers or re-order. In this case, the potential ‘lifetime value’ of each click may make PPC a good use of budget.
In the absence of a direct and reliable profit, any other use of PPC is best carried out in conjunction with an ongoing SEO strategy. The remaining points outline these in turn.
To Carry Out Keyword Testing
PPC can be effectively used to test for the most profitable keywords prior to investing in longer term SEO. There are frequently a large number of short and long tail keywords relevant to a particular website. However, it may not always be clear which ones are buying keywords and which ones are non-buying keywords (i.e. users doing research or doing product comparisons). A good long-term SEO investment will eventually target all these keywords, aiming to achieve rankings for most of them. But if the choice of keywords available is very large, it may make sense to conduct careful PPC tests to evaluate which keywords produce the best conversions, and then focus SEO activity on those keywords.
To Influence On-Site Optimisation Decisions
PPC can be used to test aspects of the website design, including conversions, prior to investing in longer term SEO. No amount of investment in traffic generation is worthwhile unless that traffic converts into sales or leads once it arrives at your site. A quick PPC campaign (i.e. a few days) can quickly reveal how well the website is managing to generate a sale or lead. If the conversion rate is acceptable, it makes sense to begin work on SEO to generate search engine traffic to that page. If the conversion rate seems low, work should be focused on improving the design of the sales pages at the same time as SEO work.
For instance, suppose a business has a new product or service which is to be sold on the website. This will require a page to be designed in order to convert visitors into buyers. A PPC campaign can bring in a large number of visitors to a number of different sales pages, allowing the response to the product to be assessed, as well as maximising the conversions of the final sales page. A properly conducted PPC campaign can give objective performance measures for the effectiveness of different design features, which will have long-term impact on the business. The same campaign can also track the keywords which generated the most clicks, allowing the SEO activity to target those keywords in future article writing and link-building.
To Achieve Time-Sensitive Exposure
Even if a keyword is already being targeted by SEO but has not yet produced the desired ranking, there may sometimes be a need to achieve traffic at a particular time such as:
- A time-limited offer, such as a price reduction or end-of-season sale
- To coincide with a product launch
- To target a specific event or season, such as Christmas, Valentine’s Day, Mother’s Day, start of the football season, back to school, etc.
- To target a particular period of time when demand for the product is highest e.g. gritting companies during winter months, spider trap products during late summer and autumn.
- To coincide with other marketing efforts, such as exhibitions or advertising in other media such as TV or newspapers
- To pick up on relevant TV or radio features which do not mention your brand directly but which are likely to result in users looking for related information online, e.g. a travel business might run a special PPC ad on ‘corfu’ keywords to coincide with a TV travel show featuring Corfu holidays
But even in these cases, we would recommend continuing with SEO methods at the same time in order to achieve organic rankings eventually. Once rankings have been achieved, additional PPC can still be beneficial in order to achieve double presence on the results page, in order to maximise traffic. During a peak time, an additional 1% share of clicks can translate into valuable orders.
To Compete With High PageRank Sites
For some keywords, the first page rankings may be dominated by several high PR sites which would take a lot of SEO to compete with. In this case, PPC may be the only way to achieve traffic for those keywords. But the keywords involved are likely to be highly competitive and therefore expensive, requiring significant PPC budget for a campaign of any significant length. In this scenario, we would advise that a steady SEO campaign will still, in time, achieve a lot more for the same budget than a PPC campaign.
To Directly Compete with Bigger Brands
PPC ads can be used to increase awareness of your brand when users are searching for your competitors name (e.g. searching for ‘tkmaxx’ or ‘matalan’, as opposed to non-branded keywords such as ‘discount clothing’). Clearly it would be very difficult to achieve a top ranking for a competitor’s own name – but PPC ads targeted on competitor names help to increase familiarity with your brand. In this case, it is especially important that the website that users land on is well-designed and on a par with the quality of the brand you are competing with, both to appeal to potential customers and to achieve a good- quality score in Adwords.
In short, even where there seems to be significant justification for turning to PPC rather than SEO, you will still get better value and more sustainable results over the long-term by combining PPC efforts with ongoing SEO, or by refocusing or ramping-up SEO effort.
Summary
The choice between investing in SEO or PPC as a means of generating traffic is actually a false one. Each has its place and delivers different types of results, and one cannot be used to replace the other. Over the life of any medium to long-term online business, both are appropriate at different times.
PPC can be a worthwhile investment if the conversion rate and lifetime value of a click results in a clear and reliable profit. And there are a number of situations where PPC is the only realistic way to compete, e.g. for time-sensitive offers, or to vie directly with competitor brands. In just about any other case, PPC results are temporary at best and will simply drain your budget. Where PPC is used, it needs to be carried out judiciously in conjunction with an ongoing SEO strategy in order to deliver maximum value.
SEO remains – and is likely to remain – the surest foundation for obtaining high-quality traffic to a website and of building the asset value of an online business. Its results are cumulative and lasting over the long-term, and need to be regarded as an ongoing investment in the infrastructure of the business. While stopping SEO activity won’t produce any immediate reduction in traffic, there will be a slow tail-off over time. In addition, other websites will be competing for the same keyword and will be actively targeting it with SEO methods, threatening to pull down your rankings sooner or later. The more competition there is for your targeted keywords, the more important it is to maintain SEO activity for those keywords, even after rankings have been achieved.
