Being found easily online is critical for a startup. With over 40,000 searches per second on Google, high search engine rankings are especially important to generating website traffic. Startups have two options available to take advantage of keywords related to their product or service, either pay per click or search engine optimization. Let’s take a look at the differences between SEO and PPC of these possibilities and how to choose the best one.
The Difference Between SEO and PPC
By paying a fee each time an ad is clicked, advertisers essentially purchase visits to their site. Advertisers place a maximum bid and compete against the bids of other advertisers for the same keyword. PPC ads appear first and are marked as an “Ad”, as shown in these search results for the keyword “Web design.”
Search Engine Optimization (SEO)
SEO placements are ranked by relevancy and authority to keyword. By using specific strategies, techniques, and tactics, websites are able to rank highly on search results pages of search engines like Google, Bing and Yahoo. Rankings are rated by “relevancy” and “authority” for the particular keyword. Since these rankings are earned instead of purchased, they are not marked as an “ad.”
SEO vs. PPC – How Do You Choose?
It can often be difficult for startups to balance out the pros and cons of SEO vs PPC, and to choose where to focus their budget and energy.
- Which one gives a better return on investment?
- Which gives faster results?
- Do consumers trust one over the other?
When determining whether SEO or PPC is a better option for your startup, there are many factors to consider, such as: time required, costs, ease of setup, short-term value, long-term value, and consumer trust. The table below addresses each of these factors and will help you decide which option is best for your startup.
|Time required||1-3 months||Immediately|
|Ease of setup||Many associated variables and involved steps.||Simple. Can be setup within a few hours by a first-time user.|
|Costs||Low, if SEO actions are completed in-house. Medium to High, if using a full-service agency.||High, especially for competitive keywords. Costs = bid amount per click x number of clicks|
|Short-term value||Low-Medium. Short gains and little traffic in the beginning stages.||High. The site continues to receive traffic while the ad runs.|
|Long-term value||High. Each step strengthens the larger picture. Success is gained by implementing effective techniques, consistently, and over time.||Low. Although ads can be optimized for better performance in the long term, budgets must be recycled each week/month to create new traffic.|
|Consumer trust||High. Consumers trust that high organic rankings are relevant, earned, and trustworthy.||Low. Consumers usually consider these ads to be purely commercial, less personal, and less trustworthy – especially for brands that they are unfamiliar with.|
Here’s another fact to consider. A large study by BrightEdge found that “51% of all website traffic comes from organic search”, while paid search only accounts for 10%.
By the way, if you’re considering using PPC as a way of testing what might work well for SEO, think again. According to SearchEngineLand, recent data “suggests that title tags that perform well in paid search don’t necessarily indicate winning SEO titles.” So, if you thought using PPC could help reduce SEO costs, you may be in for a surprise.
Traffic: Quick vs. Quality
No questions asked, PPC brings new traffic faster than SEO. Google loves ad money, and they will send you as much traffic as you can afford, as soon as you want — as long as your bid is greater than the next highest bidder. Great, right? Well, not always. In a perfect world, every click would turn into a purchase. In reality, conversion rates for PPC ads are extremely small. They are also skewed higher due to the few major competitors who dominate the PPC space in each industry. Imagine being an online travel startup, setting up a new PPC campaign. According to Smart Insights, here’s what you could expect:
- A Cost Per Click of $0.29
- A Click Thru Rate of 4.88%
- A Conversion Rate of 1.45%
Ideally, a budget of $290 would yield 1,000 clicks and 4 conversions, but, we really don’t live in an “ideal” world. Although the average conversion rate is 1.45%, this percentage is skewed by established players who already dominate the paid ad space. The conversion rate for a startup in the travel industry would be much lower than that of a dominating brand like Expedia, Priceline, or Kayak. So, when considering PPC or SEO, you need to also consider how large your brand is inside your space. For many startups, this will be relatively small.
Google’s process for creating and launching ads is relatively straightforward and can be completed within minutes. Once ads are submitted and approved, advertisers receive impressions immediately. For startups with short-term traffic goals, PPC can be attractive. For example:
- A startup offering a “limited time only” deal may need to generate traffic immediately before the discount expires.
- A startup that is testing a new feature on their website may need to send immediate traffic so they can quickly analyze the feature in a real-world environment.
Unlike PPC, Search Engine Optimization (SEO) is a long-term strategy that increases a brand’s search engine rankings while building its reputation and authority. A decent amount of up-front work is required for a startup to generate organic traffic, and it may take several months until there are any noticeable results. So when we are evaluating SEO vs. PPC on the basis of time, PPC is the clear winner: more clicks, more quickly. But, what else is there to consider?
Organic results and paid results are not equal. SEOmoz published an article stating that organic results receive 8.5x more clicks than paid search results. Keep this in mind as we re-visit our online travel startup example.
This time, however, the $290 ad budget is used to access great SEO software like CanIRank. Using the software, the startup identifies several niche keywords in the online travel industry. They develop strong SEO optimized content that is valuable to their readers. Over two months, they are able to rank first for these keywords. Instead of 1,000 paid clicks, they now have the potential to receive 8,500 organic clicks! As long as they can maintain their ranking, they will generate this same traffic, over and over again, month after month.
Consumer Trust: Answers vs. Ads
Individuals who perform Google searches aren’t always looking to buy something immediately. Usually, they are looking for accurate information from a reliable source. Now according to a survey in AdWeek, “consumers don’t like and don’t trust digital advertising.” In fact, only seven percent of survey respondents view ads favorably. So how do consumers respond when they see the “Ad” stamp beside paid search results? Not very favorably. According to Nielsen, “consumers rely on trusted content to make purchase decisions 5X more today than they did five years ago.”
If it’s not obvious by now, paid ads don’t build confidence. Yet, that is exactly what startups need most.
Consumers like to buy from brands they trust. A company that is already established and well known will likely have high conversions with PPC ads because they are already recognized as an industry leader. Startups don’t have this same advantage but can level the search engine playing field with a strong content marketing plan and great SEO techniques.
By creating in-demand and optimized content for niche keywords, startups can gain search dominance and attract valuable organic traffic. Consumers have questions. Brands that can display their expertise by providing answers through great content pieces often have the upper hand – if they can be found easily on search engines. These techniques build trust, which can translated into stronger PPC conversion in the future. In this case, it is not SEO vs. PPC, or even SEO or PPC, it is SEO and PPC working together.
Software like CanIRank makes it much easier for startups to increase their organic rankings, become the “authority” in their niche industry, and build consumer trust. CanIRank is especially helpful for startups because it makes SEO as simple as 3 steps:
- Grow Your Content: Quickly find content ideas and keywords that have high-demand, but low competition.
- Improve Your Rankings: Receive actionable suggestions that you can implement to boost your rankings quickly.
- Promote Your Content: Search through CanIRank’s promotion suggestions; a list of opportunities you can take advantage of to link your content and establish authority within your industry.
Startup SEO Case Studies
Here’s a case study on how we helped a new SaaS startup go from 0 to $50,000/ month in free, organic SEO traffic. In this situation, PDFPro was faced with a common startup dilemma; paid traffic was too expensive at around $3 per click, and low domain authority made ranking a challenge. Using a strategic approach to SEO, CanIRank increased PDFPro’s organic traffic by a factor of 200. All this new traffic was obtained using sustainable white hat methods, and at less than 1% of the cost to purchase the equivalent traffic via Google AdWords.
Fieldwire is another example of startup SEO that works. In this situation, they faced intense competition from larger established competitors who dominated the SERPS. Instead of spending money on PPC, CanIRank performed on-page optimization of the company’s highest potential pages. In addition, we revised the content strategy to balance conversions with traffic. The ranking improvements brought Fieldwire traffic worth over $10,000/year, had they purchased it through Google AdWords.
Often, it comes down to targeting the right keywords for which you can realistically compete. With Bavarian Clockworks, we focused on their category/collection pages because that seemed to be the best opportunity for ranking for somewhat valuable terms. The collection pages could target the more specific terms like Hones cuckoo clocks (brand) or chalet cuckoo clock (category) that weren’t as competitive. These pages however only had products on them. So while the product pages themselves were quite well optimized, they were lone rangers trying to rank. By adding some category focused content to the category pages they were able to leverage all the products supporting them and we had huge results there.
Win with Startup SEO
It is extremely tough for startups to compete with a PPC-focused strategy. The advantage goes to the advertiser who is willing to spend the most, and it is not unlikely for large competitors to spend over $100,000 a month on PPC ads. Smart SEO techniques, however, allow startups to take advantage of gaps in the market and succeed even with a low budget. These case studies are really to illustrate one thing: if you consider SEO vs. PPC, SEO can win at a lower cost.
Search Engine Optimization (SEO) is a long and daunting word, but the process can be simple. To win the SEO game, startups need to identify valuable opportunities and execute them successfully. Adwords is expensive, but you can try CanIRank for free. Identify what opportunities you are missing, and receive a step-by-step actionable SEO plan to boost your rankings and make your startup the authority!