As a business owner or marketer, you might be in a dilemma about whether SEO or AdWords PPC is the best approach to drive traffic and ROI for your business.
This question comes up repeatedly in marketing forums, sometimes from hands-on marketing people.
You probably already know that both are mighty traffic channels, like many others. However, you are also probably aware that using the “wrong” channel or at the “wrong time” will hinder your ROI and potentially lose both time and money.
Since there are many pay-per-click methods and platforms, we will cover Google AdWords in this article. We will also focus on search ads (ads targeting Google searches) instead of network ads (where we display banners on related websites).
In a nutshell
SEO and PPC can be incredibly powerful in driving high-quality traffic to your site and generating sales and conversions. They both can directly reach high volumes of people who are right now looking for your product online.
These searches can, in many cases, be coming from interested people close to making a purchasing decision.
You can also use both channels long-term to generate positive ROI and promote excellent user experience for your brand, and if done well, both can be scalable and repeatable.
SEO traffic takes building gradually over time.
|If we had to summarize this concept, one saves time; the other save money.|
The first considerations you need to make therefore are:
SEO services are not free, and it is crucial to remember that lousy SEO, like advice, is way more costly for your business than good SEO. Used at the right time, however, SEO builds a steady and long-lasting stream of business channelled right towards your sales offers.
SEO could target a vast range of keywords and searches simultaneously, often showing up for searches that the marketer was unaware of. As your content and authority grow, more keywords get covered, and higher search result positions are attained; therefore, visibility on search result pages increases, with more of these keywords being covered and higher search result positions achieved.
This accumulated traffic you start generating from SEO would require significant investments if you had to drive the same traffic using paid ads. The site below, for example, is still in its infancy and only converts a few hundred Euros per month into revenue.
If you look at the traffic value, as would be paid if the traffic was earned through AdWords, you can see how fast it would be making losses (due to its niche’s very high cost per click). Since SEO is the longer-term approach, one must dedicate time and money to seeing good results. Therefore, there is the risk of investing time and money for several months without knowing what the results will be like when you get there.
At the same time, if your SEO is done intelligently enough, you can minimize this risk by selecting strategic search terms that you can attain in a shorter time, which presents the most significant opportunity for sales and revenue.
Simply put, SEO is great when:
PPC is fast; you can start getting traffic and sales on day 1. It is also very scalable and can target as many keywords as you wish, but then, of course, you are paying for every click. This strategy means that money is burned quickly, and unless you have your numbers in order, you will very quickly make losses instead of returns.
There are some critical situations where PPC makes tonnes of sense.
If you are converting efficiently enough on your site and the value you get from your traffic is high enough, PPC can be rocket fuel to your growth. You are turning the dial forward and backwards and increasing and decreasing sales almost at will. For this to happen, your value per visitor needs to be higher than your Cost Per Click.
This strategy means that the average revenue that you get from each visitor, based on your past data of traffic, conversions and sales values, is higher than the cost that you would spend on AdWords to get the same type of traffic into your site.
Out of every 100 customers, you are selling two products. Each product makes you a profit of Eur100 (after deducting any costs relevant to your model).
This example means roughly (the more data you have, the more accurate this becomes) that 100 targeted visitors on your site statistically make you Eur200 in profit.
The value of each visitor is therefore 2 Euros each. Paying under 2 Euros for every click onto your site will typically give you solid odds that you will have positive ROI and, accordingly, can scale up.
The other situation is fast testing. If you are testing out an idea or product or even a new market, you might still need to learn how well things will work (or even if they will work).
You also need to find out which keywords will drive sales for you since sometimes the intent of a keyword can be different than one expects.
For example, “digital marketing malta” as a keyword seemingly refers to the services offered by agencies, but as seen by the top rankers for the term, it stems more from an intent of looking for courses.
If you have the money upfront and are okay putting some of it towards testing and saving time and effort, as well as further investment in something that may or may not even work, then PPC is great for you.
If it fails, then you have limited your losses. If it works, you will also know which keywords got the results and can focus your efforts (PPC or SEO) on them.
As you may have seen or experienced, bids can be made on competitors’ brand names. This bidding comes with risks and must be done with some degree of caution. You can always decide to defend your brand searches from falling prey to your competitors.
You will almost always pay much less for your brand name than competitors since you are much more relevant (being your own brand).
Low search volumes
There are niches where search volumes are low, but the value is high. This situation can be seen in products or services that target a specific audience or where the audience is often unaware of the solutions available.
This scenario leads to insufficient search volumes directly looking for the product. Hence, SEO efforts are much less attractive since long-term dedication will likely pay off less if you can only reach a small pool.
However, if the cost of these products is high enough, it might make sense to reach these searches easily and quickly using PPC. Prices will typically be low, and with a reasonable conversion rate, you can very quickly generate a good ROI.
Retargeting is a topic that deserves at least its dedicated article. There are many ways and methods to do retargeting, one of which is showing up for searches made by people who have already visited your site.
This strategy is a great way to continue nurturing the interest of a good potential lead and working with them down the funnel towards a sales decision.
Ideally, you would use these two together. Get data and test ideas with PPC if you afford the cash. Use SEO if you are willing to risk more time than money but start with lower-hanging fruit that can still be valuable.
Track your marketing results properly and double down on what drives business value. Suppose you start with SEO, measure which pages are generating sales for you and then use the keywords ranking on these pages for your PPC campaigns. Based on the above formula, calculate what you are willing to pay for every click and adjust your bids accordingly.
If you started with PPC, see which keywords worked well and consider targeting them for the longer-term using SEO. This method will lower your marketing spend and give you much better value and ROI as your price per visit and costs of acquisition start going down.
One thing to be careful of when using these two together is that sometimes these can eat up each other’s results. You might be ranking in very high positions organically and decide to grab more market share using PPC.
Dip in traffic due to cannibalization of keywords
When you switch on your ads, you may notice that while PPC traffic went up (obviously), SEO organic clicks went down for the same searches. This result shows that you have now started paying for clicks you were getting organically.
This situation happens more often on branded searches where people might lazily click on your ad instead of your organic results, the former being higher up on the page.
This problem can be seen below during the campaign for one of our clients.
In this case, you will need to measure both results and judge whether you are getting more sales overall than before or simply increasing the spending for the same results.