Posted on Aug 28, 2015

What is Better PPC or SEO?

What is better: PPC or SEO? Both require investment in time, money or both, so the decision is an important one, but what is the answer? Well, it depends.

Almost everything is explained better with wine. But before we indulge, if you need a better understanding of the basics you can read our guide to SEO or our guide to PPC.

Now, back to the wine. If your friend asked you whether red or white wine was better, what would you say? You may respond that it depends on a number of factors like the food that you’re eating, your mood, and your general taste wines. There’s no right or wrong answer to red versus white wine just as there’s no right or wrong answer to PPC versus SEO.

Okay, But Which Should You Choose?

PPC is good at:

  • Getting traffic to your website immediately (SEO takes time)
  • Gaining more control of how customers find you (with SEO you are at the mercy of search engines, and their policies change often)
  • Getting to the absolute top position (even if you get to number one in an organic search by SEO, a competitor could appear above you with a PPC ad)
  • Targeting the right audience (with SEO you can get lots of traffic, but they are not always ready to buy)

Now, here is what SEO is good at:

  • Increasing your credibility (people are now much more aware of the location of advertisements, and give preference to organic results)
  • Increased exposure (with PPC the best strategy is to tightly target keywords so you don’t waste money on clicks that don’t convert, but this means you can miss potential customers – SEO brings you traffic from a broad range of search terms that are three words or more. This is known as long tail keywords)
  • Giving you a good return on investment over time (PPC gets instant results, but as soon as you stop spending money on the clicks, the traffic stops)
  • Covering all search engines (with PPC you have to choose a platform to advertise on, and you don’t get any exposure anywhere else)

Making Your Selection

If you have the budget (and depending on your industry) you may want to use both SEO and PPC. SEO can build awareness of your brand and generate consistent traffic to your website over the long-term. Meanwhile you can use PPC for specific campaigns like launching a new product, promoting a sale, or capitalizing on a seasonal event.

All of your decisions should come down to ROI though, particularly when looking at PPC. In previous posts we used an example of a bicycle shop to show how PPC works.

Let’s use that example again to do some simple math:

  • Clicks on the cycling shop’s PPC ad cost $3
  • They convert one in 10 so it costs them $30 in PPC for every sale
  • The average sale is a $500 bicycle that as a 100 percent markup
  • Profit is $250 minus $30 PPC cost = $220

In this scenario the numbers add up, but what if the shop tried a PPC campaign to sell $30 cycling shorts:

  • We’ll assume this is a less competitive market, so will set the cost per click at $1
  • Let’s assume the same average conversion rate of one in 10, so the PPC cost for each sale is $10
  • The markup on the cycling shorts is again 100 percent
  • Profit is $15 minus $10 PPC cost = $5

In this scenario, the margins are much tighter, making it much riskier. If the cost per click goes up, or the conversion rate falls, the bicycle shop could easily lose money on each sale.

When you choose between SEO and PPC, look at your business and the products that you want to promote. Then work out the potential ROI. Look at the list of differences in PPC and SEO (that we listed for you above) to make sure that the strategy is making you a profit. Remember to not overanalyze your approach. You most likely have the liberty of making quick decisions – so take action. And then iterate on your strategy to win more business. Your new customers will thank you.

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