SEO vs PPC – What’s Better for You Business?
July 31, 2017
Scroll to the bottom for a TL;DR.
This seems to be a question I get a fair deal. Should my business spend money on SEO, PPC or both? As with many things in life the answer is, it depends.
For newer businesses, I almost always suggest going with pay per click, as you see immediate results. Let’s run some numbers…
Just do PPC?
Say you have $1000 a month budget for online marketing, and decide to use it on pay per click. Depending on the market (New York vs Topeka) and the search engine (Bing vs Adwords) that could get you anywhere from 300 – 1000 clicks per month in the car service industry.
Let’s assume a 15% conversion rate (I typically see 10 – 25%), so anywhere from 45 – 150 calls/emails. Let’s assume that 1 in every 5 is a new customer (I know this might be high for some) so between 9 – 30 new customers on a $1000/month budget.
Understand that like SEO, PPC needs optimization as well. When I build out an Adwords or Bing Ads account for a new client, the first month is usually going to be the worst in terms of ROI. This is because every market and business is different. I wish I could just take one successful campaign and duplicate it for every client I had; this just isn’t the case, unfortunately.
So that first month might only be 5 – 15 new clients, which should increase slowly each month as the account gets more and more optimized. Things like split testing ads, adjusting bids, adding negative keywords, and adding new keywords and ad groups can have an account performing two to three times more efficiently. That means more money in your pocket and less in Googles’. Sounds like a win to me!
Just do SEO?
Now let’s say you have $1000 a month budget for online marketing and decide to use it on SEO. Hopefully you don’t have a brand new website because if you do, and don’t have a large budget, SEO will most likely be unsustainable. Let me explain…
Google doesn’t trust new websites. After successfully ranking dozens of websites, one thing is clear: it is WAY harder to rank a new website.
I am not saying that it is impossible to rank a new website, it just takes longer and requires A LOT more work. If you are a new business I would recommend only using pay per click. Once you can afford to spend $1k+ a month and not have it hurt, you are ready to give SEO a shot (while remembering it’s going to take some time, but boy is it worth it).
Okay, so depending on your website it could take anywhere from 2 months to 8 months to start seeing ROI. You will see RESULTS (ranking improvements) immediately, you just won’t be getting very many calls when you’re on the top of the 2nd page.
It’s not as easy to give an example with SEO, as results vary quite substantially, however you usually see the same progression. For example, a new client that is already on the second page for a lot of major keywords might see the following:
1st month – 3 calls, 1 form
2nd month – 6 calls, 3 forms
3rd month – 16 calls, 5 forms
4th month – 40 calls, 15 forms
5th month – 50 calls, 15 forms
6 month – 75 calls, 27 forms
Now let’s see how much per month those leads are (based on $1000/month for SEO):
1st month – $250 per lead
2nd month – $111.11 per lead
3rd month – $47.62 per lead
4th month – $18.18 per lead
5th month – $15.38 per lead
6th month – $9.80 per lead
That first month hurt! But by the 6th month, you can see a light at the end of the tunnel. And imagine if we went for another year! The leads might get under $5 each. What does this all mean?
If you are planning on being in business for more than another year or two, you should start investing in SEO now.
I think it’s crazy when I talk to business owners who have been in business for over 30 years that are not investing in SEO. They think they never have, so why start now? I’ll tell you why: Just because you’ve been in business a long time doesn’t mean you can afford to stop acquiring new clients! You might not notice it, but you’ll slowly start to see your business lose out to the businesses that are investing in SEO and PPC.
All of my large limo clients do both PPC and SEO. This is because some people click on the ads, some people just click on the organic results, and some people click on both! Check out this study that talks about the different click through rates of different positions.
If you’re a big player in your market you should be doing both, even if you’re ranking well organically. The more real estate you occupy on the first page, the better. It also makes you look like a much larger brand when you own several positions on the first page.
For new websites, PPC is usually your best bet as you can get immediate ROI.
Any business that wants to stay relevant and grow should be investing in SEO. This ESPECIALLY applies to older businesses. Newer businesses should focus on PPC and other marketing avenues, as SEO is a substantial investment, especially on a new website.
If you have the budget, using both is your best bet as the more real estate you can take up on the first page, the larger your brand looks.