When businesses consider their marketing budgets, they are looking over the average amount of money it costs to acquire a customer using different sources. The cost to generate a customer through each medium dictates it’s effectiveness when considered in a vacuum, but you also must figure into the different forms of marketing all fueling each other as well with regards to brand recognition and eventually customer acquisition. For example, a television commercial that offers more information about a subject on a website must be considered as a combined effort, yet will only be able to be attributed to a single place as far as the source of the customer. That said, a combination of website information and rankings development for generalized keyterms has far more capacity to exist on it’s own merits as both the source of the initial customer contact and the closure mechanism. This is why the generalized term “internet marketing” is generally referring to a website as the landing and conversion place and a search engine as the initial contact that is made with the customer. The discussion of the structure of the website itself in order to influence the conversion is another discussion, and for the purposes of this article we will assume that the front page of the website, or the targeted “most important page” for some specific information that is relevant to a customer is where they will land. The discussion is the value of the starting place with regards to internet marketing, and if paid search, ads like banners on targeted websites, or organic search rankings is the most effective method of customer first contact. Since internet marketing works within the scope of budget, the question is answered by looking at the sheer volume that can be produced by each potential method.
Internet marketing can be broken down into two segments, paid and unpaid placements. Rankings for search terms that are being used by real customers to find information on products and services would fit into the “unpaid” section, although this must be considered as paid as well due to the fact that rankings are rarely acquired for competitive search terms without some form of internet marketing campaign behind them. In our case, the SEO budget itself would be the “payment” for placement, and the positions that are gained which generate legitimate traffic to the website are the placements. For this reason, we can look at the position itself that is gained as having a specific value, based upon the average click price data that is provided by Google. This means that if a term that is considered valuable for a business has an average click price of $1.00 and an average monthly impression rate of 100 searches, in order to capture the most clickthroughs possible you would need to pay that price for each click. Typically the first result seen in a search will get about 42% of people clicking through to it, and the second result will get around 25%. The numbers drop to below 1% after you are placed below the sixth position on the page, so we can make the comparison using only position #1 and #2. An average PPC budget of $42 per month should return the maximum number of clicks to the website in one month, which would mean that if it costs more than $42 per month to acquire and maintain an organic #1 position, that PPC is a better mechanism than organic SEO for that particular search. However, Google will analyze website content and also rank the site for comparative terms, which means that if there are two different but similar terms, Google will consider positioning the page within it’s organic rankings for both, and thus generating more traffic than the single term. Factor in that PPC click prices are usually dictated by competition, and it becomes easily arguable that identification of competitive terms with good traffic levels and applying a working SEO program to them will produce far more traffic to the site than PPC each month, provided a top three result can be achieved by the internet marketing company.
A common question is “should we run a PPC campaign at the same time as SEO?” Our typical response is to run PPC until organic rankings are achieved, then to remove that phrase from the PPC campaign and re-apply the budget to a different term which is not currently ranked for. This way, PPC is always taking up the slack for terms that are not organically presenting the website. In order to effectively do this, a company must continually monitor both organic rankings and PPC targets, adjusting bids ongoing.
So which is better for internet marketing campaigns, SEO or PPC? The answer is that they both serve a purpose, but you can always expect to pay more for PPC entrances than you would for competitive SEO entrances due to the fact that traffic is not limited by budget within SEO like it is within PPC. A number 1 position organically gets 42% of the clickthroughs, no matter how many of them there are. If there are an average of 100,000 monthly searches for a term and your SEO can achieve a number 1 position for your website, you can expect 42,000 monthly clickthroughs for that term. If the average PPC price per click on that term is $1.00 then the value of that organic position to your business is $42,000 per month, which is what you would have paid for all of the clicks. This illustrates the true value of a good SEO, if positions can be gained within high volume searches, the amount of traffic produced should far outweigh what can be purchased through PPC.