The adage ‘’Slow and steady wins the race’’ from the hare and tortoise classic is something we all grew up hearing. But how much of that can we actually apply to our learnings in the world of dynamic digital marketing that’s typically fast-paced. Interestingly, when it comes to the debate between who’s the better marketing channel between SEO and PPC for effective digital marketing, that adage just might hold true. How, you ask? Read on to learn more.
Search engines play a prominent role in driving potential traffic to your website. While many believe that search engines do not guarantee leads and conversions, here are some impressive statistics that show how search engines help generate more leads, sales, and revenue.
- 66% of online experiences/surveys begin with search engines [BrightEdge]
- 61% of B2B marketers stated that organic traffic generates more leads than other marketing initiatives [HubSpot]
- The #1 website listed in Google search has an average Click-Through-Rate (CTR) of 32% [HubSpot]
- 85% of visitors click on organic search results and ignore paid banner ads [UserGuiding]
But, how does one maximize search potential? Should you invest in SEO or paid marketing to maximize the impact of your marketing budget? This post will explore the pros and cons of SEO vs Paid Marketing at a higher level so you can choose the best marketing channel to boost your ROI.
What is SEO?
A quick recap – Search Engine Optimization (SEO) refers to a series of best practices to improve your company’s rank in organic search results of Google, Bing, and other search engines.
From keyword research to on-page optimization, technical optimization, and link building, several tactics focus on creating stellar user experiences. By ranking higher in search results, your website can earn quality traffic, generate leads, and boost sales.
Pros and Cons of SEO
|Continuous flow of organic traffic||Results are not instantaneous (nor guaranteed!)|
|Offers impressive ROI ||Requires constant maintenance|
|Boosts credibility among potential clients||Rankings can be lost with time|
|Provides 24 x 7 brand promotion ||Being controlled by the algorithm|
|Optimizes user experience||Actions can be penalized|
|Delivers long-term results||High level of uncertainty|
What is PPC?
PPC (Pay-Per-Click) advertising also known as Paid Marketing is a more direct approach, where you pay for better search visibility via “Sponsored Links.” It encapsulates everything from paid shopping lists to banner ads. PPC can become your favorite choice if you like concrete data on your marketing strategies. It works on a pay-per-click model, which means you will be charged for every click on your ad.
Pros and Cons of PPC
|Provides instant traffic||Expensive|
|Ads can drive warm leads||Visibility disappears as soon as the campaign is stopped|
|Easy method for product validation ||Shrinking ROI potential|
|Independent of algorithm changes||High competition and bidding wars|
|Multi-layered targeting options||It takes time to find a winning formula|
|Increased brand recognition||Difficult to convert savvy audience|
Is SEO Better than Paid Marketing?
Now that we’ve gone through the basics, let’s dive a little deeper.
SEO and paid marketing both work best when they work in tandem. They are powerful marketing channels for any business trying to drive genuine website traffic. While both are useful for your business, it is essential to understand how these tactics work and which would best suit your needs. They both share the primary objective –
- Tap into search engines to grow your business
- Increase brand awareness and credibility
- Gain new customers
To create a holistic search strategy, there are plenty of ways in which SEO and PPC complement each other. Here is how they provide improved results and boost your search engine marketing efforts –
Although paid ads are the first thing users see, organic content takes more space, i.e., ten snippet spots on the page. Features like FAQ schema, Google maps pack, Knowledge graph, and rich snippets help brands to appear in additional areas of a results page.
SEO has no direct cost, and the placement in organic search results is provided for free by search engines. Therefore, it is a highly cost-effective strategy in the long run compared to paid search that involves direct cost.
- Key Performance Indicators (KPIs)
The two important KPIs of digital marketing are click-through rate (CTR) and conversion rate (CVR). According to a study by Backlinko, the average CTR of organic search results is 31.7%, and paid ads are 5%. While paid searches are 1.5x likely to convert, organic searches are likely to convert 2x times.
With PPC campaigns, you can go deeper into keyword research, trends, and keyword volumes. To improve the quality of organic content, use the “paid keywords” in headings, title tags, meta descriptions and blog content you want to amplify.
PPC is your ticket to target audience in specific geographic locations, demographics and interest. With PPC ads, you can show certain ads in a particular location, while displaying different ads in another location.
SEO offers plenty of benefits for businesses. It dramatically increases brand awareness while building credibility for your brand. However, SEO does not guarantee #1 position every time. If your website is on top of the SERPs, it might go down in the coming weeks. To regulate this downward movement, you need to combine SEO with PPC to achieve a stable rank for a long time.
Should I Invest in SEO or PPC?
Whether you should invest in SEO or paid marketing (PPC) depends on what you want. Before you move forward, answer the below questions –
- What is your budget?
- Are you looking for instant results?
- Are you looking for a way to validate your product?
- How are your competitors ranking in organic search?
- What is your website’s domain authority(DA)?
Both SEO and PPC are the best methods to drive traffic to websites. But, there are some instances where SEO wins over PPC and vice-versa. For a quick breakdown of SEO Vs Paid Marketing, check out the below scenarios –
If you run a start-up or you’re a small business owner, you may not have enough budget for paid advertising. Although SEO is a long-term strategy, it won’t break the bank and is a greater investment of your time. You will see a constant flow of traffic once you start ranking. Invest in SEO if –
- Your business can dedicate time
- You wish to gain leads through web search
- You have a strong focus on the target audience
- You have enough budget to meet SEO goals
Conversely, if you are an eCommerce site for example looking to compete with giants like Amazon or eBay, your website will struggle to outrank organic search results. In such a case, PPC ads would kickstart your brand awareness campaign and help you reach a wider audience. Invest in PPC advertising if –
- You have a high budget
- You have a time-sensitive offer
- You are launching a new product
- You don’t have time to optimize the website
In summary, SEO improves your rankings and online presence, while PPC focuses on validation and to get in front of as many eye-balls in a short amount of time.
Does SEO Convert Better than PPC?
In the race of SEO vs Paid Marketing, PPC works faster. However, it doesn’t mean long-term. When it comes to conversion rates, SEO generally surpasses PPC, (dependent on industry) . The industries with significant differences in conversions include –
- Banking – SEO converts 7x better than PPC
- Luxury Goods – 3.7x PPC
- Medical equipment – 3.4x PPC
- Legal firms – 3.4x PPC
- Construction – 3.5x PPC
ROI- SEO v PPC
Also, the return on investment is higher with SEO vs paid marketing techniques. Let’s kick off and start with an example of the average conversion rate of SEO Vs Paid Marketing.
The formula to determine conversion rate or ROI is –
(Profit from Investment – Cost of the Investment) / Cost of Investment
Conversion from SEO:
Let us assume your objective is to sell a product on your website worth $200.
For SEO, you need to invest a fixed amount, let’s say $1000 per month. Here we are going to calculate the ROI from SEO over a period of 6 months. Based on the SEO efforts, the organic traffic to your website might vary each month. Let’s say –
- 1st Month – 700 visitors
- 2nd Month – 1000 visitors
- 3rd Month – 900 visitors
- 4th Month – 1100 visitors
- 5th Month – 950 visitors
- 6th Month – 1050 visitors
Total organic traffic to your website in 6 months = 5700 visitors
Considering the average SEO conversion rate as 2.4%, the website generates 136 conversions (sales).
[Note: 2.4% of 5700 is 136.8]
Profit from investment = $200 x 136 = $27000
Cost of investment = $1000 x 6 = $6000
Conversion rate from SEO = ($27000 – $6000)/ $6000
In this case, the ROI from SEO would be 350%.
Conversion from PPC:
For PPC, your investment might be different depending on the CPC. While the minimum bid per keyword in Google Adwords is 5 cents, the maximum bid goes upto $50 per click. If you are into industries like – technology, law, accounting, finance, or construction – you should be ready to pay a high cost per click for the top keywords. Check out some of the most expensive keywords here.
Let us assume the CPC fluctuates between $1.5 and $3 in 6 months. The below table shows how much you need to invest each month to drive the same number of visitors as SEO.
From the above table, the total paid traffic to the website = 5700 visitors
Consider the average conversion rate as 3.75% for Google ads, the website generates approximately 213 conversions (sales).
[Note: 3.75% of 5700 = 213.6]
Profit from investment = $200 x 213 = $42600
Total cost of investment = $1400+$3000+$2250+$1650+$1900+$1575 = $11775
Conversion rate from PPC = ($42600-$11775)/$11775
In this case, the ROI from PPC advertising would be 260%.
The above example shows SEO converts better than PPC that too with less investment.
Case Studies and Examples
Here are some examples of companies that found more significant results with SEO over PPC.
Case Study #1 : Buffer
Buffer, one of the leading social media management companies grew their organic traffic from zero to 1.5 million monthly sessions within 6 years. Taking full advantage of social media and content marketing, they published more than 1000 blog posts. By consistently updating the posts with outdated information and publishing them, they experienced a dramatic growth.
Case Study #2 – Snack Nation
Snack Nation, a B2B snack delivery service provider leveraged the power of content marketing to increase their traffic by 59%. The case study published on backlinko revealed their systematic approach to outreach in order to build reliable backlinks. By coupling the best SEO practices with content marketing, they could increase the traffic to 10,000 visitors per month that generated $100,000 recurring revenue each month.
Case Study #3 – Slidebean
Slidebean had an interesting approach to SEO i.e. targeted advertising. They realized that organic search results were getting the majority of the traffic. To help their posts climb the ranks, they used advertising. The overall spend was about $70,000 on content marketing and advertising for a period of 12 months and received a traffic of 50,000+ monthly visitors/month that generated a revenue of $206,334.
Case Study #4 – Saviom Software
Saviom Software, leading software organization with enterprise-level solutions in resource management primarily generated its leads through Google Adwords. While these generated a good number of leads, the cost per lead (CPL) continued to increase. They realized that organic presence will help them reduce the CPL and invested in SEO. We (Growth Ganik) conducted an audit of their website to identify the gaps and implemented the best content marketing strategy. Within a month, the organic traffic jumped by 200%.
The above SEO case study examples showed many ways to perform well in search engines. You can achieve the same positive outcome by going through the key findings and applying the best tactics to your site.
SEO Vs Paid Marketing? Final Verdict
Some marketers see SEO vs Paid Marketing as an either-or competition.
SEO is a slow burner and takes a lot of time. However, your site will grow as you constantly optimize your website, write blog posts, create inbound/outbound links, and post guest blogs. With time, search engines will recognize the credibility of your content and push more traffic to your website.
Conversely, PPC is quick and is a great test for quick validation of your product. But, when you stop paying search engines – your ads halt. So, before investing in PPC advertising, you should test, monitor, and tweak the ads – as search engines will judge the ads, just like they do with SEO.
So relating to the context of the adage “slow and steady Wins the race,” we have a clear winner with SEO over PPC.
About the Author and Growth Ganik
Aakash Gupta is the co-founder of Growth Ganik, an SEO agency working with SaaS and tech businesses across Australia.
He also runs a blog on remote working and remote tech, Sorry, I was on Mute, which has a readership of more than 30,000 people per month.
If you are interested to learn more about the company or looking for SEO help for your organization, email at [email protected].