Choosing Between SEO & Pay Per Click: How to Estimate Traffic and More
I recently talked to somebody that had setup a new business and they wanted some guidance on this question:
"Which marketing channel would be better for us at the beginning: Pay per click or SEO?"
I'll answer this in a way that's relevant to English and Chinese marketing.
First of all, let me say that there is no one-size fits all answer to the question of pay per click (PPC) vs. SEO. It depends on the situation.
Traffic Now or Traffic Later...
One of the most profound differences between SEO and pay per click is the timeline. A pay per click campaign can be started right away and traffic results are obviously immediately. SEO, on the other hand is a long-term effort.
"For most companies that don’t have mature online marketing efforts established yet, PPC can play a big role in developing initial demand and filling in for leads until SEO starts kicking in. There’s an old graphic from Elliance that I like that shows this concept well"
The image above displays the concept quite well. But just how much "Time" is involved? I'll pull up some real data from accounts of ours to give you an idea. I've removed the traffic numbers, but it's all data from real accounts we run.
Example 1: PPC Traffic Over One Month
In this chart, you can see the pay per click visits over a one month period (The x-axis units are days). In this case, we spent close to the allowed budget each day, until the end of the month when the client requested a budget increase. The traffic levels and budget were easily controlled.
If I showed you a PPC traffic example over several months, it would be quite similar. We have excellent control of the campaign.
Example 2: An Ongoing SEO Campaign
In this example, the site was launched around the end of August 2011. It was promoted via SEO and inbound marketing methods only - no pay per click. Over the first two months, there was very little traffic. Then traffic increased in a pattern roughly like the S-curve pattern in the image from Elliance above until it flattened out as we reached top rankings for our target keywords. Around August of 2012, we adjusted the keywords to focus on keywords with lower search volume but better targeting for the business and received top rankings for those right away too. Since then, it's been relatively flat. Note that this SEO campaign is for a limited topic range and a limited budget - the site has #1 rankings for the target keywords and the goal is now to maintain those rankings only.
Example 3: Cost per Click for Pay per Click
Now, let's compare the cost per click between these two examples. This is where it gets real interesting.
For the pay per click example, the cost per click remained fairly steady over the weeks. It went up and down based on competition, budget changes and other events. But overall it remained very similar. In fact, the cost per click has been within about 0.9 to 1.1 USD the whole time. Note that this was our desired result for this campaign - we increased spend and held average CPC relatively steady in order to maximize profit. It also would have been possible for us to decrease CPC and hold spend steady.
Example 4: Cost per Click for SEO
I wish we had weekly data for this one. But the image still speaks for itself. Cost per click for the SEO campaign dropped dramatically over the initial 3 month period, then pretty much leveled out. This was in a niche market with a limited search volume. The pay per click cost per click for this market would be about 2.5 times the cost per click achieved via SEO. So, SEO returns a much better ROI in this case than PPC would, but only after it had been running for 2 or 3 months.
So, just how long do you have to wait for SEO results?
I tell clients that they should see a positive return on investment in 3-6 months. I also recommend that they commit to at least 6 months, and preferably a year in order to really get what they want out of SEO. Of course, it depends on the competition and other factors as well, but 3-6 months is a good rule-of-thumb.
What Else is There to Consider Besides Traffic Levels and Cost per Click?
Pay per click is amazing for testing product-market fit!
We do a lot of work with businesses that are just entering the Chinese market. They don't know what they're doing yet! They need to test their pitch, their marketing channel and, most importantly, they need to test their product. With pay per click, it's possible to get a flow of visitors to the website right away. A business can then analyze their behavior, gain feedback and make changes.
Pay per click is predictable
It's very easy to draw up a conversion funnel for a pay per click campaign and analyze results. Results can be analyzed on a weekly basis or even a daily basis. If it doesn't work, changes can be made or the campaign can be shut off. A business could even fire their current pay per click manager/agency and try another one.
With SEO, that isn't the case. While an SEO veteran like myself can at least guestimate results and traffic levels, that is extremely difficult for many business owners to do. Plus, business owners run the risk of accidentally hiring a poorly-performing SEO agency.
Ranking well organically improves trust
Organic results have a higher click through rate - especially so on Google, but less so on Baidu. But besides that, some users have a certain preference. They see an organic result as being more official, and a paid search result as being an advertisement.
SEO and inbound marketing as a whole is much better at helping a business build trust. I find this to be especially true when it comes to selling services or high-end customized products.
Back to the Specific Question
Now, let's take the specific business I mentioned at the beginning of the post as an example. I've changed some details, but here's a description of their situation:
- It's a new business. They haven't done any marketing yet and the website was just activated.
- It is in a mid-level competition niche.
- On the topic of Australian nature tours. (Not really, but it makes a good example.)
- As a new business, the service is untested.
- I believe their budget is sufficient for a pay per click campaign or an SEO campaign, but not both at this point.
In this case, I recommend that they prioritize pay per click first, then move in to SEO. With a pay per click campaign, they can learn what they need to know in order to adapt their product and marketing to suit the Chinese market.
While their Australian nature tours idea sounds good, it needs to be tested. Are Chinese people more in to kangaroos or koalas? Or maybe they want to see ostriches...or maybe they want to eat ostriches. There are many other things to consider - everything from accommodation to nightlife - and pay per click marketing can help them get those answers faster.
Have you used pay per click and SEO? What other advice do you have for when it comes to choosing between the two?