PPC verses SEO

The listings down the left side of a search results page are called “organic” or “natural” listings and the way you get your website listed is by performing SEO. Listings in the shaded areas on the top and down the right side of the page are called “Ads” and the way you get your website listed there is by having a PPC advertising campaign using programs such as Google AdWords or MSN adCenter.

There are pros and cons for each and a serious internet marketer will use both techniques to increase the chances of getting a prospect to visit their website. They want all the "real estate" they can on the SERP (Search Engine Results Page). Here are a few comparisons I think you might find interesting.
 

Cost

SEO - There is usually an up-front cost and then an on-going monthly cost. The cost variables have to do with the number of keywords and the amount of competition that exists for those keywords. The more competition there is for a keyword, the more work there is to perform; content creation and link building. It usually takes anywhere from 3-6 months to see the results you are looking for, meaning a first page ranking for your most important keywords.

The advantage of SEO is that once your webpage has been indexed by the search engines, you don't pay anything when someone clicks on your listing and is taken to your website. This particularly advantageous when your conversion rate is low, meaning you get relatively few leads or sales per visit.

However, remember that it can take 3-6 months to achieve a first page ranking for your most important keywords and during those months you are still paying a monthly fee to the agency in addition to any up-front costs.

Your on-going cost is to keep your ranking or improve your ranking, as well as adding new keywords. If you don't pay the on-going fee to maintain your rankings, your listing will begin to slip away.

PPC - Some agencies charge an up-front fee and then a monthly maintenance fee. The monthly fee is derived from the monthly click charges (10-20%) or the number of keywords in your account or some other arbitrary amount.

This is where my business model is different than most other PPC agencies. I charge by the hour. See my article on How much will it cost for more information.

Initial work required

SEO - There is a subtle difference in the way these two methods are performed. With SEO there is a presumption that you already know the keywords that will produce the best results. This is not necessarily a good assumption. How do you know what the best keywords for your business really are? What if the wrong keywords are chosen? You could waste a lot of time and money if you choose incorrectly! Also, the list of keywords is usually small compared with the number of keywords in a PPC campaign.

Generally speaking, the procedure for getting ranked organically has to do with two things; on-page and off-page characteristics. The number of keywords for a small business SEO campaign is about 20-30.

On-page refers to the content and meta data on any given page. The more content you have containing a specific keyword phrase, the higher your rank will be for that page. Off-page refers to other websites that link to your website. The best scenario being a hypertext link with the text being the actual keyword you want to get ranked for, coming from a website that has a higher page rank (PR) than your website, and without a reciprocal link from your website back to the other website.

PPC - With PPC, determining the keywords that deliver the best performance is an inherent part of the process. Keywords that don't perform well are deleted or have their bids reduced and keywords that do perform well are bid into higher rankings.

A significant portion of the work done to build a PPC campaign is keyword research. Various tools are used to identify words and phrases prospects use to search for your products. When you consider all the different matching options and the use of negative keywords, the total number of keywords in a small business PPC campaign can be a few hundred to as many as a few thousand.

On-going work required

With both SEO and PPC, the ranking of your listing is determined by a computer program called an algorithm. These algorithms are always changing and these changes will affect the rank of your listing. An astute account manager will be on top of these changes and adjust your campaigns accordingly.

SEO - Because the amount of work required for each keyword involves creating several paragraphs, if not several pages of content, as well as link building, there is a constant backlog of keywords to work on. In addition, one of the critical elements of the SEO ranking algorithm is the "freshness" of the content. It is critical that the agency constantly update the content associated with every keyword or the rank will begin to fall.

PPC - Once the keyword research has been done, the campaigns, ad groups and ad copy have been developed and launched, a process of keyword bidding begins in order to position the respective ad in the appropriate position based on its relative value to the business. The more keywords in the account, the more work will be required.

Some keywords are clearly more important than others. In addition, an astute account manager will undergo a process of ad copy split-testing. Ad copy is so significant it can make a 50% difference in the CTR for any given keyword. Generally, I will go through 3-4 rounds of split-testing for each ad group before arriving at the one that remains.

Timeframe

SEO - Most agencies will tell you it will take 3-6 months to achieve a first page ranking for your best keywords. The time required to actually perform the work may only take a few days, but you are at the mercy of the search engines indexing schedule to see a change in the ranking.

PPC - Depending on how the agency schedules the work, it should only take a few days to begin to see results once the work begins. Depending on the number of keywords and the amount of traffic, it will take additional time to bid each keyword into the appropriate ad rank. The amount of work that is required to "fine-tune" a campaign is not trivial and is often under-valued by the advertiser. Once the campaign has been developed, it can appear in the search results within a matter of minutes.

Metrics & tracking results

How do you know if your investment in search engine marketing is paying off? What is the ROI?

SEO - There is nothing inherent in SEO that answers this question, although most agencies provide reports that show where your website ranks for specific keywords. But where is the beef? How many new leads or sales did you get for the money you spent on SEO? In order to answer that question you will need a separate application such as web analytics or a shopping cart application. Something that can tie a specific visit from a search engine visitor to a meaningful action on your website. This action is generally called a conversion. If you don't have some mechanism to perform this function then you are doing little more than rolling the dice and hoping something good will happen.

PPC - The entire PPC campaign management exercise is devoted to measuring results and making adjustments to improve performance. All major PPC service providers include conversion tracking as a standard feature. However, it is up to the website owner to create meaningful actions visitors can take on their website and install the conversion tracking code properly. See my article titled PPC Implementation Strategies for more information.

In addition to conversion tracking, there are other useful metrics that can be used to determine how well your campaign is performing. These include things such as Click-Through-Rate (CTR) for keywords and ad copy, Cost-Per-Click (CPC) and search term quality.

Flexibility & responsiveness

SEO - There is an inherent lag time because you are at the mercy of the search engines ability to find the content on your website or on another website that links to yours. This makes it difficult to change the way your listing reads and your ability to add new keywords (products & services). This can be especially challenging if you deal in seasonal items.

PPC - Ad copy can be changed and new keywords can be introduced in a matter of minutes. Entire campaigns can be turned on and off like a light switch. Campaigns, can be set to run at any time of the day or night, and any day of the week.

Risks

Unless you are an expert in SEM yourself, you will be entrusting your on-line reputation and investment to the agency you chose. This comes with a certain amount of risk that you should be aware of.

SEO - Remember I mentioned that your ranking is determined by computer programs called algorithms? These algorithms are the search providers secret sauce and they go to great lengths to keep them a secret and to insure that ingenious individuals don't use nefarious practices to game the system. Otherwise known as black hat techniques. These techniques may catapult your ranking in the short run, but if detected by the search providers could get your website banned from future search results! Many innocent companies have awakened to find themselves out of business online because of the actions of an unscrupulous SEO consultant.

PPC - There are also rules and guidelines for creating PPC campaigns, but breaking the rules usually results in the temporary suspension of a keyword, ad group or individual ad. As with SEO, blatant failure to adhere to Google’s policies will result in account suspension and eventual banning from the AdWords program.

Perhaps the biggest risk with PPC is whether it ultimately produces a profit. Just as with SEO, you have professional fees to create and manage your account. But with PPC you have the added expense of click charges.

There is no guarantee that PPC will work for every product and every business. There must be enough profit margin in any given sale to cover the costs of your campaign, just to break even. If you are serious about knowing if it will work for you, then you need to be prepared to make a commitment to perform an adequate test. The cost to perform the test is determined by the amount of agency fees and click charges. I recommend you budget 300-500 clicks to perform an adequate test. To get a feel for the amount of consulting fees, see my article on How much will it cost.

Location targeting

This refers to your ability to include or exclude visitors to your website from search engines based on where the searcher is located.

SEO - It is not possible to geographically target your ad using SEO, unless you add a geographic qualifier in every keyword, such as “dallas widgets” versus simply “widgets”. When you optimize your website, you are optimizing for the entire country and competing with everyone else for the same keyword phrase. How many surrounding towns would you have to include if you were to geographically qualify every important keyword with every town you wanted to serve?

PPC - If your business serves a local market, you can have a campaign with location targeting that is as precise as a couple of miles. This campaign can have keywords with no geographic qualifiers. That means you can have keywords like "widgets". Then you can have a complementary campaign with the same keywords, but with geographic qualifiers for people who are physically outside your designated market, but are looking for your product. For example, someone in California might be searching for "widgets in Dallas, TX".

Compelling ad copy

I'm talking about how effective the words are that appear on the search results page. Do they create a compelling reason to click on your listing versus your competitor?

SEO - The search results from an organic search (the results that are produced from SEO) often contain text which is sub-optimal from a marketing perspective. Searchers often see sentence fragments with less than compelling text. The listing is typically a portion of your meta description tag.

PPC - With PPC the advertiser has a great deal of flexibility with the ad copy. It can be tested, tracked and modified in a matter of minutes to improve performance.

Ranking

SEO - SEO agencies always talk about being "on the first page" and most search results pages have 10-12 organic listings. Agencies will feel as though they have been successful even if your listing is at the bottom of the page, "below the fold", meaning the searcher is required to scroll down to see the listing.

Ninety percent of searchers don't look beyond the first page and 60% don't even scroll down the page. The idea of being in the top three positions is usually very difficult for popular keywords.

PPC - The whole process around PPC is based on maximizing ROI (Return On Investment), so given that ad ranking has a lot to do with the cost per click (CPC), ad rank is very important and unique to each keyword.

For my own PPC campaign, I have some keywords I want to rank in position two or three and others I want to appear on the second page. When you pay by the click, you look at every keyword as if it were an employee. Some employees are more valuable to your business and therefore you pay them more.

Modifications to your website

This refers to the need to actually modify your existing website to improve the campaign performance.

SEO - Earlier I described the initial work required to perform SEO. A big part of performing SEO has to do with modifying and creating new content as well as changing the web page meta data. Therefore, you will need to give the SEO agency access to your website. One classic challenge you face with SEO is that the copy that the search engines like doesn't usually appeal to prospects. It just doesn't sound natural or provide compelling sales copy.

PPC - No website modifications are necessary to have a PPC campaign. However, that's not to say that your campaign can't be improved by making website modifications. One of the important elements of the quality score algorithm is landing page quality. Landing page quality has to do with the relevance between the keyword, ad copy and the content of the landing page. For example, if your keyword is "apples", then Google wants to see the word apples in your ad and content on your landing page that's all about apples and not oranges or fruit.

Building a successful PPC campaign is an on-going process. In almost every case I get to the point with a client where the biggest inhibitor is the website. It might be that it needs customized landing pages that are highly relevant to the keyword and ad copy or the website needs a facelift because it doesn't sell as effectively as it could. However, these are the very same characteristics that would affect the performance of an SEO campaign.