When it comes to online marketing, there are two strategies that are most effective and are most popular to use: organic search engine optimization and pay-per-click advertising. Let me give you a brief definition of each method to help you in your assessment:

What is search engine optimization?

According to Wikipedia:

“Search engine optimization (SEO) is the process of improving the volume or quality of traffic to a website or a web page from search engines via “natural” or unpaid (organic or algorithmic) search results.”

So in SEO, you want your website to display certain keywords or phrases that are relevant to your niche or business so that when somebody is searching for those keywords on search engines such as Google, MSN, and Yahoo, your website will be on top of the search engine results page (SERP).

What is pay-per-click advertising?

In pay-per-click advertising, web advertisers are basically buying their way to the top of the search engine results pages.

Here’s a quick definition from Wikipedia:

“Pay-per-click (PPC) is an Internet advertising model used on websites, in which advertisers only pay their host when their ad is clicked. PPC advertising services include Overture and Google AdWords. With search engines, advertisers typically bid on keyword phrases relevant to their target market. Content sites commonly charge a fixed price per click rather than use a bidding system.”

Both SEO and PPC have been proven to help websites earn web visibility, but how do we know which one is best to use? Let’s explore the advantages and disadvantages of each method to help us choose which one is the best for our company.

Cost

The SEO method is basically free of charge. Search engines do not care about the size of your company. A low-budget website can still find its way to the top of the search engine results page as long as it’s targeting the right keywords that are relevant to the search engine query. You don’t have to pay anything for your keywords to score high in the SERPs. Of course, you have to eventually pay employees if you are outsourcing, but the long-term benefits of SEO definitely pays off.

PPC advertising, on the other hand, often requires a sizeable amount of investment, especially if you are looking at long-term results. Every click that you get for your text ad will cost you around $0.05 for a regular keyword and as high as $60 if you’re targeting a top keyword. One month of investing in PPC advertising will cost you hundreds or a few thousands of dollars. The sad thing about this is that not all clicks will help you generate sales – some people just click by accident and some will just click your ads out of curiosity.

According to Dynamic Digital Advertising (DDA), keyword costs for PPC ads increase by at least 20% a year. One survey stated that 57% of their respondents aren’t too happy about what they are paying for their keywords and keyword phrases.

According to NewsWriter.us, “if a webmaster doesn’t combine PPC advertising with highly persuasive copy, then he may be paying more for his advertising than he may be earning from the traffic.”

Click-Through and Conversion Rates

Several studies show that there is more chance of people clicking on organic search engine optimization rather than on PPC ads. Research say that only 30% of search engine users click on paid listings, as opposed to 70% who prefer clicking on organic listings. More studies say that people find information they were searching through paid links only 40% of the time. This just demonstrates how SEO is a more effective marketing strategy compared to PPC ads.

Furthermore, according to DDA, organic search engine optimization presents a greater opportunity for converting traffic into customers since this method offers more potential targeted traffic. Organic click-through rates are three times higher compared to paid listings or PPC ads. The conversion rate is also 17% higher than paid listings.

Reliability and Relevance

When it comes to reliability, organic SEO results weigh much heavier than paid results. In fact, paid results irritate some searchers every so often.

According to Scott Buresh of Search Engine Guide, “only 14 percent of searchers trust paid listings and 29 percent report being ‘annoyed’ by them.” In another study, it was determined that 66 percent of customers don’t trust paid ads.

“Users also have rated organic search engine results as more relevant than paid results. On Google, 72.3 percent felt that organic results were more relevant, while only 27.7 percent rated paid results as more relevant. Yahoo offered similar results, with 60.8 calling organic results relevant compared to only 39.2 percent for paid.”

Immediate Results

The good thing about PPC advertising is that it draws immediate traffic to your website. This is opposed to using SEO wherein you won’t get much traffic from the search engines like Google during the first few months. So if you’re looking forward to get your website link at the top of the search engines right away, better start working with Yahoo’s Overture and Google Adwords.

Long Term Results

Okay, so you’ll be happy with PPC advertising, at least for the first few months – while your money still lasts. But once you run out of budget, the high search engine rankings also end as well. And this is the sad fact about PPC advertising…everything just depends on the money.

The good news is that there is SEO, and this will give you more lasting results. According to Buresh, “in search engine optimization, the optimized site content and other changes made to your site can have an impact on your search results until the next change in a search engine’s algorithm, or possibly even beyond.”

My Conclusion

Based on the factors mentioned above, we can see that SEO definitely has an advantage over pay-per-click advertising. However, we still cannot dismiss the fact that there are some cases where the PPC method is more effective than SEO. In my opinion, combining the two still works best, but if you’re limited by budgetary constraints, of course you have to focus on only one strategy to be more effective. It’s just a matter of choosing the right method at the right time.