While print publications can grab attention with headlines and images, websites have to employ more sophisticated tactics to get noticed in the competitive online environment. Since search engines are the biggest source of website traffic for most businesses, the best way to drive traffic to a site is to secure a prominent position on a Search Engine Results Page (SERP). The two key ways to do this are using Pay-Per-Click (PPC) advertising and Search Engine Optimisation (SEO)
PPC is the quickest and easiest way to appear at the top of the SERP. Businesses pay to be in a prominent position, which generates instant traffic, and a fast ROI. Meanwhile, to appear on page one of the search results through organic methods can take months of Search Engine Optimisation (SEO) work before you see a return.
Does this mean that businesses that can afford it should focus efforts on PPC activity? Not necessarily. While paying for clicks can deliver short-term gains, the goal for many companies is to get their organic listing ranking as high as possible. That’s because paid traffic dries up the minute a business stops bidding, compared to SEO where there is no fee to pay for each click. SEO is also where there are the most clicks to be earned: research shows that 55% of users click on the first three organic results [1].
In this article, we’ll explore how small businesses can use PPC and SEO to drive traffic and grow revenue, and how to combine them to maximise ROI.
PPC: instant ROI
PPC involves businesses bidding to appear as a ‘sponsored link’ at the top of SERPs when someone searches for a keyword related to their offering. As the name suggests, the business only pays if the link is clicked. This approach brings instant results, so is well suited to campaigns where a business or product is too new to have organically achieved a first-page listing. PPC encompasses Google Local Services Ads, which can be used to direct customers in your area to your services.
David Gavin, head of digital growth at Add People, recently told the Business Class: Money Minutes podcast that companies should look for at least a 3:1 ROI from PPC before considering investing more money. It’s also important to factor in agency fees, if you don’t have the resource and expertise to run the advertising in-house. AgencyAnalytics suggests that agency fees typically equate to 10% to 20% of a business’s monthly ad spend [2].
The challenge with PPC is that the cost-per-click can vary significantly depending on how many other businesses are bidding for the keyword. ROI can be improved by showing Google that your content is of high quality and is highly relevant to the search term. Get this right and you’ll be rewarded with a high ‘Quality Score’, which means you pay less for each click.
SEO: sustained revenue growth
SEO is a long-term strategy to earn clicks without having to bid for them. It centres on a business convincing a search engine that its website can provide the information, products, or services users are looking for.
Research indicates that UK businesses can expect to pay an agency anything from £1,200 to £9,000 per month on SEO, based on how much resource they require [3]. Unlike PPC, SEO does not bring instant results: it can take between five to 16 months to break even, depending on which industry the business operates in [4].
A long-term approach is needed because SEO is the art of convincing a search engine that your business is an authority on a subject. This starts with optimising your website content around target keywords, then extends to earning links, or ‘backlinks’, from third-party sites. These are crucial in showing a search engine that other sites deem your business to be a credible resource.
The best way to drive ROI in SEO is to spend time selecting sites to share content with (and earn backlinks from) according to their Domain Authority (DA). The higher a site’s DA, the more weight a backlink will carry with Google. Searching on a free DA checking tool, such as Semrush or Ahrefs, will reveal sites’ DA scores and therefore which are the best targets to focus your SEO content sharing efforts on.
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When to use PPC vs SEO
Both PPC and SEO have excellent business cases. SEO is best used in the long term to establish brand credibility and drive sustainable traffic to a website. This can take months and so, if the business is new or launching new products, PPC is the option that can deliver instant traffic.
It’s a balancing act, particularly for new companies, such as online course comparison site, CoursesOnline. The business’ ultimate goal is to drive traffic to the website organically, but it is only three years old. Since generating content and securing backlinks takes time, the business puts significantly more budget into PPC than SEO. General Manager, Sarah-Jane McQueen explains: “We don’t have the same history of receiving backlinks as our competitors, so we have to use PPC to compete while we build up the SEO side of the business.”
“That’s particularly true when we launch a new course,” she says, “then we have no content or backlinks, so we have no choice but to use PPC. Ultimately, our strategy is to use PPC until we can compete in SEO and then dial down paid search.”
CoursesOnline puts 89% of its search budget into PPC and the remaining 11% into SEO. While PPC delivers 21% of all business leads, SEO is not far behind on 12%. Put simply, PPC delivers nearly twice the leads, but at nine times the cost.
Combining PPC and SEO to maximise ROI
It’s clear that PPC and SEO both deliver results, in different ways. The key to growth is to make a long-term commitment to SEO while understanding the tactical advantages of PPC, according to Andrew Jacobs, digital marketing manager at mattress business, Otty. Jacobs recently appeared on Business Class: Money Minutes to explain how the company combines both approaches to increase sales.
Otty operates in a highly competitive field and so has worked hard to get backlinks for its hybrid mattresses. While it ranks well for the keyword organically – SEO delivers a 6:1 ROI – the business still runs PPC on this search term. This, Jacobs says, is because it generates an incremental profit.
“All you have to do is work out how much a sale is costing you from PPC and compare it to how much profit you make. It’s not more complicated than that. It’s why we bid on ‘hybrid mattress’ but not on ‘pillows’. A click costs roughly the same but the profit margin isn’t there with pillows like it is with a hybrid mattress.”
To supplement instant gains with longer-term growth planning requires investment in both SEO and PPC, even though the former may not produce significant returns for several months. The American Express® Business Gold Card could be useful in helping to spread the cost of investing in search. It offers the flexibility of payment period of up to 54 days, so you have more time to pay for the cost.²
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Sources
[1] Sistrix, Why (almost) everything you knew about Google CTR is no longer valid
[2] AgencyAnalytics, How Much Should You Charge for PPC Management?
[3] On Top Marketing, How much does SEO cost? Average prices in UK 2021
https://www.americanexpress.com/en-gb/business/trends-and-insights/articles/ppc-vs-seo-roi/
