IN THIS ARTICLE:

    Google processes more than 7 billion searches every day. That’s 7 billion opportunities for marketers to deliver their message to prospective customers. But how do you maximize the enormous potential of search? Should you invest your resources in SEO, PPC,  or both to maximize the impact of your digital marketing budget? 

    SEO and PPC each require a significant investment — but which investment drives more conversions and better ROI? 

    In this article, I’ll explore SEO and PPC at a high level and uncover the pros and cons of each. Then, I’ll dive into how you can use the two channels together to maximize marketing potential. Finally, I’ll talk dollars and cents and show you how to effectively use conversion data to allocate marketing spend for SEO versus PPC.

    What is PPC and SEO?

    So what are PPC and SEO? How do they work, and more importantly, how can they work together to help you streamline your marketing efforts? 

    What is SEO?

    Search engine optimization (SEO) is a series of best practices that increase your site’s traffic (and the quality of that traffic). You might associate SEO with long-form content or blogs. In reality, a good SEO strategy includes strategic backlinking, technical optimizations, improved user experience, and more. 

    SEO strategies have shifted over time — co-evolving with search engine priorities. But one thing remains the same: if you share helpful, authoritative content on your site and make it easy for human searchers and Google alike to parse, you’ll likely improve your ranking in search results.

    What is PPC?

    PPC refers to pay-per-click advertising, a broad industry that encapsulates everything from the traditional banner ad to Amazon’s paid shopping listings. Originally, advertising platforms or websites displayed ads and charged advertisers for every click. 

    Although this is still true for the vast majority of campaigns, PPC has now expanded to include campaigns that are charged by the view (like YouTube campaigns) or with pricing that adjusts to meet certain performance benchmarks, like Google’s target ROAS campaigns. 

    SEO: Pros and Cons

    ProsCons
    Increases awareness and builds your brandTakes time to be fully effective 
    Strengthens trust and credibility
    Low cost, high ROIResource-heavy 
    Major strategic advantage over competitorsCan be highly competitive for top terms
    Yields long-term, compounding results

    As you can see, SEO offers a lot of benefits for businesses. Done correctly, it greatly increases brand awareness and does so in a way that builds trust and credibility for your brand. 

    With a good SEO strategy, you can capture impressions on highly relevant terms that are expensive to win with advertising.

    But SEO does have some challenges. 

    First, it takes time to be fully effective — you might need as long as six months to see meaningful results. By that same token, SEO results tend to compound over time, yielding progressively better ROI the longer your efforts continue.

    Second, it can be more difficult to budget for because SEO costs may not be as clear-cut as the cost of PPC campaigns. Optimizing for organic search can be a resource-heavy endeavor, especially if you need to create a large amount of content or make major website updates.

    Finally, although crafting a sound SEO strategy offers your business a unique competitive advantage, it can be tough to rank for highly relevant industry terms. It requires a significant commitment of time, energy, and strategic planning to win the top spot for keywords with a high monthly search volume (MSV). 

    PPC: Pros and Cons

    ProsCons
    Pay for your ideal keywords and page position with near-immediate resultsOngoing cost
    Straightforward, transparent data on keyword and campaign performanceKeyword targeting readily apparent to competitors
    Rapid iteration with simple A/B testingRise of automation = less transparency in testing
    Simplified audience targetingAudiences increasingly have “banner blindness” 
    Growing adoption of ad blockers.

    Good PPC campaigns also build brand awareness and drive customers to your site, although it typically comes with a much larger cost-per-click.

    PPC doesn’t require the long lead time that SEO campaigns do, so advertisers can see a big increase in traffic in just days. Once you choose your ideal search terms, it’s just a matter of allocating the budget to pay for those impressions. 

    PPC also allows you to retarget site visitors more directly than you can with SEO. Testing new messaging is easy, too, since most platforms offer transparent analytics for campaign performance.

    Of course, PPC has its drawbacks. 

    The ongoing cost is the biggest one: PPC campaigns require a budget, and depending on the industry, campaigns can be extremely expensive. Cost per click is also on the rise across verticals. Not to mention that when you stop spending on PPC, there’s an abrupt halt to your paid search traffic.

    You can easily target key search terms, but your competitors can too — and they can readily see which terms you’re choosing to target. Audience targeting is simple, but audiences themselves are becoming more ad-savvy and may view ads, in general, with a level of skepticism. 

    On the point of an ad-weary audience, more than 763 million devices are blocking ads, so relying on PPC alone could mean you’re missing out on a big (and growing) group of customers! 

    Finally, PPC campaigns are trending heavily toward automation, and a “black box” format, meaning the historical benefits of straightforward data and testing capabilities are becoming less accessible to advertisers.

    With so many pros and cons on both sides, which is the best choice for increasing conversions? 

    Let’s take a look at the data. 

    SEO vs. PPC: Which is Better for Conversion?

    As you might guess, conversion rates vary a lot depending on the industry and the channel. For nearly every major industry, SEO surpasses PPC for overall conversion rate (sometimes by a significant margin!), but there are a few outliers that go the opposite direction.

    Find the average conversion rate for your industry for SEO and PPC in the table below. 

    Average Conversion Rate for SEO and PPC By Industry

    IndustryOrganic SearchPaid Search
    Agency2.3%6.6%
    Automotive2.5%1.3%
    B2B ecommerce4.0%1.8%
    B2B Services7.0%5.0%
    B2B Tech 1.0%2.5%
    Cosmetic and Dental3.5%1.9%
    B2C ecommerce3.3%1.2%
    Financial4.7%6.0%
    Healthcare5.6%5.1%
    Industrial 8.5%4.7%
    Legal4.3%1.8%
    Professional Services12.3%7.0%
    Real Estate3.2%1.5%
    Travel8.5%8.5%
    Data Source: Ruler Analytics, 2021

    In the B2B ecommerce sector, organic searches convert nearly three times as often (4% compared to 1.8%), and the same is true for B2C ecommerce (3.3% to 1.2% for PPC). Legal PPC campaigns are some of the most expensive, often at tens or hundreds of dollars per click — and yet SEO converts at a far higher rate (4.3% to 1.8%.) There are only a couple of verticals, like Financial and B2B Tech, for which PPC campaigns can convert at a higher rate than organic search.

    5 Industries with Biggest Gaps in Conversion Rates: SEO vs. PPC 

    1. B2C Ecommerce
      SEO converts customers at 2.8x the rate of PPC.
    2. Legal Services
      SEO converts customers at 2.4x the rate of PPC.
    3. B2B Ecommerce – SEO converts customers at 2.2x the rate of PPC.
    4. Real Estate – SEO converts customers at 2.1x the rate of PPC.
    5. Cosmetic & Dental, Industrial, and Professional Service – SEO converting customers at 1.8x the rate of PPC.

    So why the gap? 

    Credibility is one consideration. 

    Google places a high value on content that’s trustworthy, authoritative, and valuable to the reader. 

    Essentially, users who arrive on a site through organic search are more likely to encounter the kind of content that encourages conversion. 

    Meanwhile, searchers are getting better at recognizing advertising, while at the same time,they’re becoming more skeptical of it. Users who arrive on a site through PPC may already be less likely to convert.

    Learn how to track your SEO conversion rate and how SEO can help you improve your conversion rates.

    The Benefits of Using PPC and SEO Together

    So why are PPC and SEO always pitted against each other? True, they are theoretically two sides of the search engine marketing coin, but any good marketer understands that both of these channels have a part to play in a broader digital marketing strategy. Use PPC and SEO to serve distinct objectives and you won’t have to worry which one is “better.”

    SEOPPC
    …reaches prospects at different stages of the buying process.…helps with SEO keyword research.
    …builds a stronger web experience for PPC traffic.…assists in a competitive SEO landscape.
    …offers a level of authority and trust that PPC campaigns don’t.…drives traffic while you wait for SEO to impact rankings.

    Want to learn more about these benefits? Let’s dig in.

    1. PPC Ads Help with SEO Keyword Research

    Test your SEO keyword strategy with PPC ads by targeting ads to those search terms. You’ll understand the results of the test quickly and can decide whether to build those keywords into your long-term SEO planning. 

    Keyword and conversion data from PPC tests are great building blocks for your SEO strategy. 

    A/B testing of landing pages is a great example. Set up a test in Google Ads (or any other PPC platform) and run it for a week or two for key terms or audiences. At the end of the testing period, you’ll have a great dataset to determine whether the test was successful, and if it was, you can iterate those changes across other landing pages being served at the top of search results.

    2. PPC Can Assist in a Competitive SEO Landscape

    PPC campaigns have one distinct advantage — the sky’s the limit if you’ve got the budget for it. Set up a campaign, target a set of keywords with the appropriate bids, and boom, you appear at the top of the page for those terms. You can rank above competitors almost immediately — as long as you’re willing to spend the money to do so.

    SEO, on the other hand, takes more time and upfront effort to outrank your competitors. 

    This leads me to the next point…

    3. PPC Drives Traffic While You Wait on SEO 

    PPC can generate traffic while you’re working on a long-term SEO strategy. SEO is essential for creating long-term growth through credibility-building (especially when you consider the drawbacks of PPC I mentioned earlier), but PPC helps fill in the gaps while you’re working on content and optimizing your site.

    Learn more about how to promote your blog through PPC ads while you wait to rank in SERPs.

    4. SEO and PPC Reach Prospects at Each Stage of Their Journey 

    Very few buyers will reach your business through a single channel. They might see social media ads, find your content in a Google search, and click a remarketing display ad before finally converting. 

    As an example of PPC and SEO working together, remarketing ads can keep your brand top-of-mind after an initial touch via organic search. You can even customize messaging around engagement with specific content.  

    Good marketing teams meet the customer where they are — and that means leveraging a solid PPC program and a long-term, data-driven SEO strategy that complement each other.

    Download our customer journey mapping template.

    5. PPC + Organic Search = More Total Traffic

    Boost the total amount of traffic to your site by targeting high-performing keywords twice: with PPC and organic search. Doubling up on targeting strategic keywords increases the likelihood of customers encountering your brand and expands your reach across multiple listing formats. 

    Optimizing for organic search bridges the trust gap between customers and paid ads by providing authoritative, educational content that addresses specific customer needs. 

    6. SEO Makes Your Site Stronger for PPC Entrances

    Many SEO best practices have benefits beyond boosting organic traffic! Website updates like improving site speed and optimizing for mobile create a better experience for PPC traffic as well as those entering from search results.

    Some SEO improvements also have implications for campaign performance. For example, improving the titles and meta descriptions for products to match customer intent is great for SEO —  and it’s a huge boost to shopping ad campaigns, too. 

    Likewise, many of the factors Google uses to determine page quality for organic search translate to Quality Score in Google Ads, so designing pages with those best practices in mind can improve your Quality Score for advertising (which often lowers cost-per-click!)

    SEO + PPC: The Bottom Line

    SEO and PPC complement each other, and both are an important part of a good marketing strategy.

    How to Budget for SEO vs. PPC

    By now you’re thinking, “Okay, I need to do both PPC and SEO and do them both well. How in the world do I budget for that?” After all, you live in the real world with competing priorities – and you’ll need to figure out how to balance your investment in each of these channels to maximize your overall marketing spend.

    When I’m grappling with strategic questions like these, I can almost always depend on data to lead the way to an answer! 

    Let’s explore how you can use conversion rates to determine high-level budgets for both PPC and SEO marketing.

    How Do Conversion Rates Translate to Budgeting?

    As we saw in the conversion rate tables above, for most industries, SEO is a far more efficient investment, but PPC provides important support to funnel prospective customers to your website. 

    The best way to balance what you spend on SEO versus PPC? Align your investment to the relative ROI of each channel. 

    Let’s take a look at an example.

    You’ll obviously want to measure the conversion rates for both PPC and SEO for your company specifically, but in the following example, I’ll use one of the industry benchmarks from the table above. 

    Example Budget Based on the Conversion Rates of SEO, PPC

    Industry: B2C Ecommerce

    Based on industry averages, we know these facts:

    SEO Conversion Rate: 4.0%

    PPC Conversion Rate: 1.8%

    PPC Cost Per Click: $1.16

    Let’s assume these additional values:

    Average Order Value: $15

    Annual Digital Marketing Budget: $100,000

    This company has $100,000 to spend, with an average cost-per-click for PPC of $1.16.

    If the entire budget goes to PPC ads, those ads will drive 86,207 clicks.

    With a conversion rate of 1.8%, PPC ads will drive 1,552 sales and, assuming an AOV of $15, will produce $23,275.86 in revenue.

    That’s pretty good, right?

    For the sake of simplicity, let’s assume SEO will drive an equal number of sessions given the same budget (although we know that often, SEO will often drive more sessions given the same investment.)

    With a conversion rate of 4%, SEO will drive 3,448 sales at our assumed AOV of $15 to produce $51,724.20 in revenue. 

    If SEO can produce more than twice as much revenue for the same investment, your budget should reflect that. 

    Right-Sizing Your SEO Budget

    Based on conversion rate data, you might consider shifting your budget to a 60/40 or 70/30 split in favor of SEO.  Stay flexible here. We’ve had customers cut their PPC budgets even further based on the revenue they’ve generated with SEO. Pay attention to the conversion rates farther down the funnel to get the most accurate sense of ROI, and continue to adjust your spend based on your results.

    Read some SEO success stories here.

    When you look at the new SEO vs. PPC split in your budget, it might look like more money than you’ve ever budgeted for SEO before. Why would you invest so much money in driving traffic from organic search when it delivers customers to your website “for free?”

    The Answer is in the “O”

    Search engine optimization is a discipline that amplifies luck-of-the-draw, “free” traffic into a strategic pipeline of qualified leads by increasing your search visibility. Being more visible in search results means that your business will be found 1) ahead of the competition and 2) exactly when your audience is ready to hear your message.

    Optimizing your site for organic search requires significant resources. But, given the higher conversion rates and documented ROI, it’s an investment that pays dividends that compound over time. 

    The Final Analysis

    SEO vs. PPC, Which is Better?

    Although the big fight is often billed as an “SEO vs. PPC” scenario, the reality is, it’s a false choice. Both SEO and PPC are valuable additions to your marketing plan. 

    The biggest takeaway is that SEO is a worthwhile investment in its own right, and it would be a mistake to overlook the significant opportunities it presents while you’re crafting your budget. Remember, although organic traffic is “free,” optimizing for it isn’t.

    While each channel can play an important part in your overall strategy — SEO often produces a much greater return on investment, and your budgeting should reflect that.

    Ready to realize your site’s full search potential? Get a free proposal to learn more!

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