When people hear about online marketing, they often think of two of the more popular methods that a company can use to enhance its visibility on the Web. There are two primary methods of gaining targeted search traffic: Pay-Per-Click advertising (also known as PPC), and organic search engine optimization (SEO). In an ideal world, we would use both strategically to maximize website’s profile. However, budgetary constraints often make this impossible and trying to do both on a limited budget or with minimal resources can result in neither campaign producing ideal

What is Organic Search (Organic SEO)?

Google started off in 1998 as a simple search engine like many others at the time.  A user types what they are looking for into the Google search box and Google then searches through its gigantic index of known web pages and tries to return the most relevant web pages to whatever the user typed in.  Because Google did such a good job of finding good relevant pages, it wasn’t long before they became THE trusted source for internet search.  These search results are now called the organic search results.  No company can buy the top listing, it’s purely the determination of Google which sites appear first for any given search term. This is, in fact, the core of Google’s business.  If they ever stop providing good relevant search results, internet searchers will go somewhere else to search.

Pay-Per-Click

While the above statistics may make organic search engine optimization seem the clear choice in all cases, in certain situations it actually can make more sense to do pay per click advertising. For those looking for fast results on a small budget, a pay per click campaign may be the answer.

What is Pay Per Click (PPC)?

PPC stands for Pay-Per-Click advertising. In the Fall of 2000, Google started AdWords, their do-it-yourself pay-per-click advertising system.  In this system, anyone can bid to have their ad shown next to the organic search results for specific keywords.  Currently Google shows these sponsored ads on the side and (usually) the top of the organic results.

Generally speaking, the more you bid for a keyword, the higher your ad will appear on the page.  What makes this model so popular over other advertising methods is the fact that you “pay per click”.  In other words, you only pay if someone actually clicks on your ad and visits your website. 

Why You Should Care

It’s completely understandable if you just want to hire someone to handle driving traffic to your website.  Most successful businesspeople are too busy with their core business to concern themselves with website marketing methods.   But much the same way you wouldn’t buy a car without at least checking the make and model, the miles, etc., you need to know the basic difference between PPC and organic search engine optimization (SEO).  If you don’t, most web marketing companies are going to decide for you and they’ll probably choose the method that’s most profitable for them, not you.

How to Decide Between Organic Search and PPC

By looking at the advantages and disadvantages of each method and then weighing your current financial situation and long-term goals, you should be able to make an informed decision as to which advertising method is right for you. 

Organic search engine optimization campaigns offer several distinct advantages over pay-per-click advertising campaigns, as many recent studies have shown. What follows is a brief listing of some of the findings.

Advantages of Organic Search

  • Visitors Are Free
    Visitors that find you through organic search results are totally free, so there’s a very high ROI on those clicks.
  • More Clicks
    More searchers click in the organic search results than the PPC ads, so a #1 ranking in organic will bring you more targeted traffic than paying for #1 placement via PPC.
  • More Trust
    Most searchers trust Google, and when they see that Google considers your site the #1 authority for their search term, most will inherently trust you as well, making it easier to convert those visitors into customers. 
  • Less Long Term Financial Investment
    The initial investment in an organic search campaign depends greatly on the competitiveness in your industry.  It’s important to think of it as a long term investment.  You won’t see immediate results, but by investing a little time and money each month, you can gradually build your site up to attract loads of free targeted traffic.
  • Propensity to Click
    Study after study indicates people are less likely to click on paid search ads rather than on results from organic search engine optimization. For example, one study found that search users are up to six times more likely to click on the first few organic results than they are to choose any of the paid results (1), while an eye tracking study (2) showed that 50 percent of users begin their search by scanning the top organic results. Other studies have shown that only 30 percent of search engine users click on paid listings, leaving an overwhelming 70 percent who are clicking the organic listings (3). And a 2003 study found that 85 percent of searchers report clicking on paid links in less than 40 percent of all of their searches, and 78 percent of all respondents claim that they found the information they we searching for through sponsored links just 40 percent of the time (4).
  • Trust
    Studies are beginning to indicate that the trust level for organic results is much higher than that of paid results, and that paid results are looked upon as a nuisance by some searchers. One study found that only 14 percent of searchers trust paid listings, and 29 percent report being “annoyed” by them (5). Another study found that 66 percent of customers distrust paid ads (6). Clearly, it’s not generally a good idea to upset potential customers before they even click on your link.Value of Visitors
    Organic search engine results tend to be seen as non-biased, and they therefore are able to provide visitors that are more valuable. The overall conversion rate, or the rate at which searchers take a desired action on a site, is 17 percent higher for unpaid search results than the rate for paid (4.2% vs. 3.6%) (7). Trends also have shown that more of the sales that result from search engines originated in organic search listings (8).
  • Long Term Results
    While a pay-per-click campaign may produce results more quickly than an organic search engine optimization campaign, organic search engine optimization campaigns can give you results that last. When the budget runs out for a pay-per-click campaign, or when your company decides that the pay-per-click campaign should be terminated, the results end as well. With organic search engine optimization, the optimized site content and other changes made to your site can have an impact on your search results until the next change in a search engine’s algorithm, or possibly even beyond.
  • Relevance
    Users also have rated organic search engine results as more relevant than paid results. On Google, 72.3 percent felt that organic results were more relevant, while only 27.7 percent rated paid results as more relevant. Yahoo offered similar results, with 60.8 calling organic results relevant compared to only 39.2 percent for paid (13).

Disadvantages of Organic Search

  • Ranking Takes Time
    You may start seeing noticeable traffic increases within a few weeks to a few months. It all depends on the competitiveness of your industry. 
  • Requires Investment in Your Website
    You’ll need to commit more of your time to get good organic rankings.  With PPC, you simply drive visitors to a specific page and try to get them to convert.  With organic search, you’ll need to build up a site full of good content that is useful to your visitors and portrays your company as the authority on the topic. 

While the above statistics may make organic search engine optimization seem the clear choice in all cases, in certain situations it actually can make more sense to do pay-per-click advertising. For those looking for fast results on a small budget, a pay-per-click campaign may be the answer.

Advantages of Pay-Per-Click Advertising

  • Nearly Instant Traffic
    After you setup a PPC campaign, your ads will often start showing within about ten minutes. 
  • Laser Targeting
    It’s easy to monitor which keywords bring visitors that actually convert and which don’t.  Then you can focus your ad spend on the highest converting keywords. 
  • Powerful Money-Making Tool
    If you could spend a dollar to make two dollars, how many dollars would you spend?  That’s exactly how a well optimized PPC campaign works. 
  • Results
    As previously stated, the results from pay-per-click advertising are immediate. On the other hand, an organic search engine optimization campaign may take up to three months or more for results to be apparent. In this case, pay-per-click is advantageous for those who are looking to promote an initiative that will go live in a short amount of time, or whose business is seasonal in nature and who only do promotion during certain months of the year.
  • Budget
    Small businesses with extremely tight budgets may find that pay-per-click is a better investment than organic search engine optimization because a pay-per-click campaign will almost always cost less–good search engine optimization companies simply do not work for $100 per month. By limiting a campaign’s keyphrases to highly specific terms relevant to a company’s business, there will not be a large amount of traffic generated, but the traffic that is generated will be specific to the desired result. Plus, choosing such specific phrases can make them less expensive on a per click basis. Moreover, in niche markets with a high average dollar sale, where there’s not a great amount of search activity because the prospect pool is limited, it may not make sense to engage a quality organic search engine optimization firm at several thousand dollars per month when you can instead buy varying niche-specific keyphrases and generate traffic in that way.
  • Easier to Handle In-House
    Non-complicated pay-per-click campaigns can be handled much more easily in-house than an organic search engine optimization campaign. Such campaigns generally involve business to business and high-end, service oriented companies, not those geared toward a large consumer base. Since organic search engine optimization requires a steep learning curve and since there are so many questionable tactics that can put a site at risk of penalization (the tactics that neophytes to search engine optimization are likely to use), it may make more sense to run a pay-per-click campaign. Since you are dealing directly with the engine, i.e., Yahoo Search Marketing and Google AdWords, you don’t need to pay a middleman, and these sites offer helpful tutorials on how to use pay-per-click marketing. Perhaps most importantly, the concept of pay-per-click is much easier to grasp and understand at the outset.
  • No Contracts
    Most organic search engine optimization campaigns require a contract of a certain length because SEO companies know that meaningful results will rarely happen overnight. When dealing with an in-house pay-per-click campaign, obviously a contract is not an issue. But in general, even when you are dealing with an agency, you will not tend to need to sign a contract because the agency instead makes money on a percentage of the spend, although there may be a setup fee. Without a contract, you are free to reallocate marketing dollars elsewhere if you discover that the pay-per-click campaign is not providing the desired results.

Disadvantages of Pay-Per-Click Advertising

  • Every Visitor Costs Money
    Some visitors may remember your site and come back again, but overall when you stop paying, the visitors stop coming.
  • A High Converting Website is Critical
    A good PPC campaign can drive lots of targeted traffic to your site, but if your site doesn’t convince those visitors to convert, it’s all wasted money.  A good web marketing company will help to optimize your site to convert. 
  • Competition is Growing
    The amount of competition for those top 10 ad spots is growing every day.  This can only drive the cost per click up over time.
  • Pay-Per-Click Costs Rising
    Meanwhile, pay-per-click costs are rising steadily. Between October 2004 and December 2005, average keyword prices rose from around $25 to just under $55 (10). And the cost of keywords can increase by as much as 100 percent during the holiday season (11). These costs aren’t going unnoticed either; one study of problems experienced by U.S. companies found that 57 percent of respondents felt that their desired keywords were “too expensive,” while 51 percent expressed concern that they are overpaying for certain keywords (12). On the other hand, when you outsource to an organic search engine optimization firm, your costs will likely remain more stable than the prices for pay-per-click advertising.

So you can see that Pay-Per-Click advertising is useful for getting traffic immediately.  It’s important to have a website that effectively turns visitors into customers in order to make more money than you spend.  Once you establish that however, PPC can be a powerful and profitable advertising method.

Combining Pay-Per-Click Advertising and Organic Search

The ultimate marketing strategy is usually a nice balance of both PPC and organic search.  You can start driving traffic to your site now through pay-per-click while gradually building organic search rankings.  As the site starts to rank highly for certain keywords in organic search, you may decide to stop bidding on those keywords on the PPC side. In the end, no single advertising method is perfect for everyone.  It all depends on your urgency to get sales, the amount you’re willing to invest in your site and your long-term goals for your website.  Whatever your situation, Bitwise Logic can customize a package that builds targeted traffic and increases sales while working within your constraints.

Clearly, organic search engine optimization has some distinct advantages over pay-per-click advertising. However, there are undoubtedly certain situations and scenarios where pay-per-click advertising makes more sense fiscally and strategically. With a high enough budget, you would be able to have an effective organic search engine optimization campaign running in tandem with an effective pay-per-click campaign. But if you have to choose one, look into your unique situation before you decide.

Sources

  1. Oneupweb study
  2. Enquiro, July 2005
  3. Are Corporate Web Sites Optimized for SEO? by Paul Bruemmer, Search Engine Guide, August 2005
  4. WebAdvantage.net 2003 Survey
  5. eMarketer, April 2003
  6. eMarketer 2003
  7. Marketing Sherpa, August 2005
  8. Are Corporate Web Sites Optimized for SEO? by Paul Bruemmer, Search Engine Guide, August 2005
  9. Pew Internet and American Life Project, 2005
  10. Performics, 2005
  11. Ibid
  12. Jupiter Media, June 2003
  13. iProspect, Survey Sampling International, WebSurveyor, and Stratagem Research, April 2004