Ultimate SEO vs PPC Comparison for Marketers

Search Engine Marketing

Search Engine Marketing

For years now, the debate over whether to use PPC or SEO has taken a lot of room on the Internet.Marketers and content creators are churning out articles, videos, podcasts, infographics, and just   about every other kind of content to help (read confuse) business leaders in their attempt to stay top for any  searchable variation of SEO vs. PPC.

We feel there’s no need for the debate, and so we’re writing this one article as the ultimate  comparison of SEO and PPC.

Read this one and you’ll see no need to find any other on the subject.

In fact, we won’t even try to keep you tagged to the end of the article before you get to know what  we know is the right option for you. There’s just no need for that suspense. Let’s get you that  answer right now:

If you want quick, but temporary, results, choose PPC. If you want slow, but lasting, results, with  much higher traffic (CTR) go for SEO. If you’re really smart, mix them together and get the best of  both worlds.

The rest of this article talks in considerable detail about why we know what we just told you. It’s  mostly just statistics and data from some of the most reliable institutes in data analysis industry and online marketing. Something like this: Forrester Research, a leading market research firm, and  Forbes predict US market’s total spending on digital marketing will reach $118 and $120 billion  respectively.

Those are big number, we’ll say. Here are some more big numbers for you.

US Retail Industry Digital AD Spending

US Retail Industry Digital AD Spending

The picture above allows us to have a look at how much the US retail sector will be spending in the coming years. Retail is the biggest spending business sector when it comes to digital marketing.

eMarketer produced these predictions. While the image is quite self-explanatory, you can see the budget for digital ad spending increases from around $11 billion to over twice the number between 2014 and 2020, with the sector maintaining a consistent 22% approx. of total money predicted to be spent on digital advertising.

WHAT ARE SEO AND PPC?

In case some of you are new to the concepts of SEO and PPC, let’s begin with showing you what  these terms mean.

PPC, or pay-per-click, is one technique for advertising your business online. You pay a search engine, such as Google, for every click you get on your ads based on the keywords you picked to pay for. You pick the keywords you want to attract customers with, make your ads around them, and pay the search engine every time those ads are clicked on when they’re showed in the said search engine’s search results.

In contrast, SEO, or search engine optimization, is the collection of all techniques you use – starting with proper web design, integrated customer support, high quality content, going all the way down to guest writing and building formidable backlinks — to reach the top of search engine results without spending on online advertising.

When you search for a keyword in a search engine’s text box, you get suggestions in return, which are a mix of paid ads and organic results that are laid out in a particular manner.

With Google, the usual layout of the first SERP (search engine results page) has a few ads on top, followed by what Google calls a featured snippet, which is followed by a list of organic results. Many SERPs contain more ads at the bottom.

This is what the picture looks like:

These paragraphs should give you a perspective on how there may be a debate over SEO and  PPC like they’re mutually exclusive choices, and the reason there’s actually a debate is the fact that incredible amounts of money and commercial activity are involved in these two phenomena.

In any case, let’s get on with the statistics we were talking about. Remember: whatever the numbers   say they don’t lie.

STATISTICS ABOUT SEO AND PPC

Starting with a bit of stats from previous years, Rand Fishkin of Moz, after attending Enquisite’s  summit for digital marketers in late 2008, shared some numbers about the amount of money spent on  both PPC and organic search between 2004 and 2007.

Statistics About SEO And PPC

Statistics About SEO And PPC

The chart shows US businesses spent over 85% of their online marketing budgets on PPC between 2004 and 2007 year-on-year while investing only 11 or 12 per cent of it on SEO, which means US firms spent 8 times more on PPC during these years.

The disparity may still be quite shocking and may even stay that way for many years to come,  thanks to the quick results of PPC, but the Forrester and Forbes predictions we shared earlier in  this  article say the trend is changing and that marketers will shift toward organic methods in the  years  to come. Their leading analyst, Shar VanBoskirt, said:

“Within the next five years, we anticipate investment in ad impressions going down. Instead, marketing budgets will go towards brand experiences, CX and in-store experiences and knowledge of sales agents – the things that will help demonstrate  brand promise.”

With knowledge and experience, marketers will deliberately spend on methods and media that are  closer to their goals in comparison and not just on quick sales.

The thing to understand here is that online marketing includes all sizes of firms and businesses, but the bigger the firm the more the spending power on marketing and advertising. With greater capital, bigger firms go after PPC more avidly because it brings quicker sales, and, since they have really deep pockets, they can spend the same kind of money on PPC year after year.

Now, the reason PPC is quicker at landing sales is because the advertiser is allowed to customize  the ad for their target audience. For example, with a Google PPC ad campaign, you decide which  region’s consumers can view your ad, what their age should be, what time of the day the ad should be visible, etc. With all that customization, your ad appears only to your ideal prospects, many of  whom end up clicking on your ad (and may even go on to purchase your product or service).

Another incredibly important thing to remember is the search engine’s incentive in paid search, such as PPC. Paid search is the biggest source of income for search engines. This is why they invest heavily in making sure they engage more and more search engine users so they can attract more advertisers and get higher prices. For instance, in March 2012, Google resealed results of a study they conducted on ad clicks related to organic results on first page of the searches. Here’s the nifty graphic they used to report their results (click on the image to read more of the results):

Impact of Organic Rank

Impact of Organic Rank

In short, the study shows how having a paid ad on Google gives you a huge (apparent) advantage over organic results on the page. So, it pays to get PPC when you aren’t doing well in organic searches, but we’ll get to these pros and cons in a bit.

This intent to provide advertisers better opportunities led Google to change the layout of its desktop SERPs (search engine results pages) so that now four paid ads show on top of the search page.

According to Net Market Share, Google currently (July 2017) owns a little shy of 80% of the online search market, which is to say 80% of global online searches are currently being done using Google.

So, the practices Google adopts have a big impact on the economy of online search market, as a whole. So, businesses (and the agencies they hire for optimization services) invest more and more in Google PPC, as shown in this graph from IgnitionOne research below that shows Google’s search market share (75.5%) in terms of the amount US advertisers spent on it between 2007 and 2015 in comparison with Yahoo and Bing combined

In short, Google holds about 80% of the world’s search market share and gets over 75% of the money advertisers in the US spend online

US Paid Search Advertising Spend

US Paid Search Advertising Spend

Organic Search Still Wins on Click-Throughs

It might sound improbable after all the data you’ve just seen but organic searches are still more profitable to businesses, and there are a number of reasons for that.

The most important of those reasons is the click-through rates (CTRs), which is simply the rate at which visitors on SERPs click on either paid ads or organic results.

Let’s have some numbers on this factor, too.

Paid Search and Organic Search

Paid Search and Organic Search

In 2016, SimilarWeb conducted a detailed study on global online shoppers and came up with some very interesting results.

One of the first simple facts that the report shares with the reader is that only 5% of the click-throughs on a SERP are on paid searches, or PPC ads in Google, while a staggering 95% approx.

Furthermore, when the research studied traffic sources for the studied shopping websites, the results showed organic results to be the biggest source for any website’s traffic while PPC remained the smallest source of traffic. While almost 39% traffic to shopping websites came from organic searches on search engines, only 1.3% of the total traffic came in from paid ads.

So, among all the measures, CTR, which is the most prominent measure in gauging search engine users’ interests and preferences, speaks in favor of organic search and SEO.

You might be thinking how that could be possible when we just showed you all those graphs with incredible amounts of money being spent on PPC year after year. Are those businesses crazy? Or just plain ignorant?

But the answer isn’t so difficult to understand. Answer this: How many times have you ever looked beyond the first page of any search you ever did on Google? Hardly ever.

Take another one: How many times have you ever clicked beyond the first few results on the search results page? Probably never.

This behavior is yours as a consumer and it is independent of what the search engine might be trying to achieve through a search. This consumer behavior is the main reason SEO is still winning and might always win when it comes to quality and lasting relationships.

Then, why do businesses spend such huge piles of money on paid search? You’ll find your answer to that question in the discussion below.

 

Understanding the Use of PPC and SEO

This is where you need to sit down and understand what each of the two optimizing techniques stand. This can be done easily by simply putting in the uses of each of them in a table. That way you can read through the advantages each of the technique brings and decide which one suits your goals better.

Understanding the Use of PPC and SEO

Understanding the Use of PPC and SEO

VISIBILITY VS. AUTHORITY

 

What becomes evident from this table is choosing between SEO and PPC is actually choosing between visibility and authority. When you pursue PPC, you’re putting up ads over organic search results that will be visible over everything else. They might make a visitor click through to your website, but there’s no guarantee they’ll purchase your service of product but you will pay for that click regardless.

Also, you need to remember what we showed you earlier: Only 5% searchers ever click on paid suggestions in SERPs.

Assuming these figures are true for searchers in all industries, while spending a ton of money on paid search, you’ll be neglecting over 95% of the people looking for services for your target keywords (how could that be prudent?).

Another problem with paid suggestions on SERPs is there’s no guarantee of expertise. Anybody with a website can pay a certain amount for their ad and have it placed over organic results for a given period of time.

Visitors know that. To them every paid suggestion in the SERPs can as much get them in trouble as it can do the work right. They know it’s risky business (why do you think such a huge majority of people simply ignore these ads?) and everybody likes to reduce risk when they’re paying money.

On the other hand, if you’re on the top of organic results, visitors on the page already take you as an expert in the field and half expect to end up purchasing your offerings because their mind is already expecting to be impressed when they click through to your website.

In short, while you’re spending more money to get instant visibility, you’re actually making searchers wary of your service. That doesn’t sound cost-efficient to us from any angle.

COSTS VS. VALUE

When going for PPC, you’re looking at high advertising costs. Let’s break it down for your ease:

When you choose your search engine, you’ll place bids for your selected keywords according to what the price it suggests. Depending on your CTR history, the bids you get might be higher or lower than the search engine’s average suggestion for the keyword.

Either way, you set a price for every click your ad will get. What happens after the click’s done is none of the search engine’s concern. You pay for the click, not for your visitor buying your offerings.

Here’s another tormenting fact: A lot of those clicks can actually simply be mistaken clicks. A visitor clicking on a paid ad just because it was more prominent or because they weren’t paying enough attention to tell paid ads and organic suggestions apart; that happens more than you’ll think. We know that for sure for over 50% clicks on banner ads on mobile devices. Even if Google fixes this problem completely and you don’t have to pay for such clicks, you’ll still be getting false clicks.[1]

Discussing the matter of paid ad costs in detail, Wordstream recently discovered Google AdWords has recorded the average CTR of less than 2% across 16 industries (which is to say about 2 out of every 100 searchers who see your ad will click on it).

More importantly, the study showed an ad in any of these industries costs $2.32 per click on average. Have a look at the data in this image:

[1] Although Google is taking care of this problem (http://www.wordstream.com/blog/ws/2015/07/06/mobile-clicks), it isn’t completely fixed yet.

:

Google Adwords Industry Benchmarks

Google Adwords Industry Benchmarks

Source: Wordstream

So, while paying more than a dollar for every click you get on your ad, where there’s no guarantee the visitor will actually buy your product or service, you’re also losing value for your offerings, since most searchers either won’t click on your ad or will click thinking you’re probably not an authority in your field.

That sounds really bad.

On the other hand, with organic search, the matter of cost is much more complicated than evaluating value fluctuations. Since there are a number of modes for setting an SEO project fee, such as monthly, hourly, and per-project scales, which are widely practiced in the industry, it’s hard to establish statistical data on the matter.

Another reason for lack of data is the wide price range of SEO professionals and agencies (Rand Fishkin of Moz conducted a detailed study of the industry).

However, the matter of understanding how SEO is more cost-effective than PPC is quite simple when it comes to the basics of it. You see, once you’ve done your part of creating great quality content, promoted it and earned quality backlinks from authority sites, and found your way to the first SERP on Google, you’re most likely to stay there for a long time and reap rewards even after you stop paying for any SEO services. You’ll keep getting non-stop traffic for all the SEO you did and as long as searchers click on your links and pay for your offerings, Google will keep you close to the top..

NOTE: We don’t recommend letting go of your SEO service even after you’ve reached the top place in SERPs, since it’s a constant race between you and your competitors. You may stop paying for SEO, but your competitors on the same page won’t get so complacent. In fact it has been our experience that the more successful an organic SEO campaign is,  the more aggressive business owners become to get found for even higher conversion keywords!

Since SEO is much more than just reaching the top of the organic search results, it encompasses many more advantages that last, while PPC offers that one moment of attention where the visitor may or may not choose to click on through to your website..

MIX ‘EM UP?

This is a complex thought, but a valid one. People have tried this technique and it works, if done right, which is again something a professional or an agency could guide you with more effectively.

These are differences that we at SEO Resellers Canada always discuss with clients asking us to help them with optimization. As honest, customer-oriented business people, we believe it’s the client’s right to know their options before they decide what they want us to do for them.

Then we deliver precisely that.

THE VERDICT

Didn’t we already give it to you in the very beginning of this article? The smartest thing to do with SEO and PPC is to use a smart mix of the two. With most of your focus on establishing your business as an authority in your industry, there’s nothing wrong with getting more visibility as long as you’re smart enough to make the ads clever and based on thorough research.

At the same time, your long-term plan should be to focus on creating great content, promoting it, and earning higher rankings in Google’s organic results. This can actually work as a safeguard against the disadvantages of PPC. As you earn higher rankings in Google’s SERPs, you can attract more organic traffic and, once you’ve reached the first page of Google’s long list of suggestions, the money you spend on PPC can do something unique and extraordinary.

When this happens, you’ll have your website listed both in the ads as well as in the organic suggestions. This only adds to your visibility and increases the chances of you getting a click.

In short, focus most of your efforts on organic SEO and maybe spend a little money on PPC for the sake of visibility.

 

HERE’S WHAT YOU SHOULD DO NOW

Now that you know so much about SEO and PPC, share this knowledge with other people you know who could use it.

Also, don’t hesitate to call or email if you have any further questions in regards to PPC and or Organic SEO.

 

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