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Organic SEO or Pay-Per-Click Advertising - Which Should You Choose?
By Scott Buresh (c) 2006

When people hear about online marketing, they often think of two
of the more popular methods that a company can use to enhance
its visibility on the Web: organic search engine optimization
and pay-per-click advertising. In an ideal world, you would use
both strategically to maximize your site's profile. However,
budgetary constraints often make this impossible, and trying to
do both on a limited budget or with minimal resources can result
in neither campaign producing ideal results. In this case, it's
usually better to focus on one or the other. But which is best
for you?

Organic Search Engine Optimization

Organic search engine optimization campaigns offer several
distinct advantages over pay-per-click advertising campaigns, as
many recent studies have shown. What follows is a brief listing
of some of the findings.

Propensity to Click
Study after study indicates people are less likely to click on
paid search ads rather than on results from organic search
engine optimization. For example, one study found that search
users are up to six times more likely to click on the first few
organic results than they are to choose any of the paid
results [1], while an eye tracking study [2] showed that 50
percent of users begin their search by scanning the top organic
results. Other studies have shown that only 30 percent of search
engine users click on paid listings, leaving an overwhelming 70
percent who are clicking the organic listings. [3] And a 2003
study found that 85 percent of searchers report clicking on paid
links in less than 40 percent of all of their searches, and 78
percent of all respondents claim that they found the information
they were searching for through sponsored links just 40 percent
of the time.[4]

Trust
Studies are beginning to indicate that the trust level for
organic results is much higher than that of paid results, and
that paid results are looked upon as a nuisance by some
searchers. One study found that only 14 percent of searchers
trust paid listings, and 29 percent report being "annoyed" by
them. [5] Another study found that 66 percent of customers
distrust paid ads. [6] Clearly, it's not generally a good idea
to upset potential customers before they even click on your link.

Value of Visitors
Organic search engine results tend to be seen as non-biased, and
they therefore are able to provide visitors that are more
valuable. The overall conversion rate, or the rate at which
searchers take a desired action on a site, is 17 percent higher
for unpaid search results than the rate for paid (4.2% vs.
3.6%). [7] Trends also have shown that more of the sales that
result from search engines originated in organic search
listings. [8]

Visitors Becoming More Aware of Pay-Per-Click as Advertising
As more and more people turn to the Internet for research and
information, more searchers are becoming aware of paid results
as a marketing tool. One study showed that not only are 38
percent of searchers aware of the distinction between paid and
unpaid results, 54 percent are aware of the distinction on
Google, which is widely recognized as the most popular search
engine. [9]

Pay-Per-Click Costs Rising
Meanwhile, pay-per-click costs are rising steadily. Between
October 2004 and December 2005, average keyword prices rose from
around $25 to just under $55.10 And the cost of keywords can
increase by as much as 100 percent during the holiday season.
[11] These costs aren't going unnoticed either; one study of
problems experienced by U.S. companies found that 57 percent of
respondents felt that their desired keywords were "too
expensive," while 51 percent expressed concern that they are
overpaying for certain keywords. [12] On the other hand, when
you outsource to an organic search engine optimization firm,
your costs will likely remain more stable than the prices for
pay-per-click advertising.

Long Term Results
While a pay-per-click campaign may produce results more quickly
than an organic search engine optimization campaign, organic
search engine optimization campaigns can give you results that
last. When the budget runs out for a pay-per-click campaign, or
when your company decides that the pay-per-click campaign should
be terminated, the results end as well. With organic 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.

Relevance
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. [13]

Pay-Per-Click

While the above statistics may make organic search engine
optimization seem the clear choice in all cases, in certain
situations it actually can make more sense to do pay-per-click
advertising. For those looking for fast results on a small
budget, a pay-per-click campaign may be the answer.

Results
As previously stated, the results from pay-per-click advertising
are immediate. On the other hand, an organic search engine
optimization campaign may take up to three months or more for
results to be apparent. In this case, pay-per-click is
advantageous for those who are looking to promote an initiative
that will go live in a short amount of time, or whose business
is seasonal in nature and who only do promotion during certain
months of the year.

Budget
Small businesses with extremely tight budgets may find that
pay-per-click is a better investment than organic search engine
optimization because a pay-per-click campaign will almost always
cost less - good search engine optimization companies simply do
not work for $100 per month. By limiting a campaign's keyphrases
to highly specific terms relevant to a company's business, there
will not be a large amount of traffic generated, but the traffic
that is generated will be specific to the desired result. Plus,
choosing such specific phrases can make them less expensive on a
per click basis. Moreover, in niche markets with a high average
dollar sale, where there's not a great amount of search activity
because the prospect pool is limited, it may not make sense to
engage a quality organic search engine optimization firm at
several thousand dollars per month when you can instead buy
varying niche-specific keyphrases and generate traffic in that
way.

Easier to Handle In-House
Non-complicated pay-per-click campaigns can be handled much more
easily in-house than an organic search engine optimization
campaign. Such campaigns generally involve business to business
and high-end, service oriented companies, not those geared
toward a large consumer base. Since organic search engine
optimization requires a steep learning curve and since there are
so many questionable tactics that can put a site at risk of
penalization (the tactics that neophytes to search engine
optimization are likely to use), it may make more sense to run a
pay-per-click campaign. Since you are dealing directly with the
engine, i.e., Yahoo Search Marketing and Google AdWords, you
don't need to pay a middleman, and these sites offer helpful
tutorials on how to use pay-per-click marketing. Perhaps most
importantly, the concept of pay-per-click is much easier to
grasp and understand at the outset.

No Contracts
Most organic search engine optimization campaigns require a
contract of a certain length because SEO companies know that
meaningful results will rarely happen overnight. When dealing
with an in-house pay-per-click campaign, obviously a contract is
not an issue. But in general, even when you are dealing with an
agency, you will not tend to need to sign a contract because the
agency instead makes money on a percentage of the spend,
although there may be a setup fee. Without a contract, you are
free to reallocate marketing dollars elsewhere if you discover
that the pay-per-click campaign is not providing the desired
results.

Conclusion

Clearly, organic search engine optimization has some distinct
advantages over pay-per-click advertising. However, there are
undoubtedly certain situations and scenarios where pay-per-click
advertising makes more sense fiscally and strategically. With a
high enough budget, you would be able to have an effective
organic search engine optimization campaign running in tandem
with an effective pay-per-click campaign. But if you have to
choose one, look into your unique situation before you decide.

Sources:

[1]  Oneupweb study
[2]  Enquiro, July 2005
[3]  Are Corporate Web Sites Optimized for SEO?
     (http://www.searchengineguide.com/bruemmer/005311.html)
     by Paul Bruemmer, August 2005
[4]  WebAdvantage.net 2003 Survey
[5]  eMarketer, April 2003
[6]  eMarketer 2003
[7]  Marketing Sherpa, August 2005
[8]  Are Corporate Web Sites Optimized for SEO?
     (http://www.searchengineguide.com/bruemmer/005311.html)
     by Paul Bruemmer, August 2005
[9]  Pew Internet and American Life Project, 2005
[10] Performics, 2005
[11] Ibid
[12] Jupiter Media, June 2003
[13] iProspect, Survey Sampling International, WebSurveyor, and
     Stratagem Research, April 2004
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Scott Buresh is the CEO of Medium Blue, a search engine
optimization company (http://www.mediumblue.com/index.html).
Scott has contributed content to many publications including
Building Your Business with Google For Dummies (Wiley, 2004),
MarketingProfs, ZDNet, WebProNews, Lockergnome, DarwinMag,
SiteProNews, ISEDB.com, and Search Engine Guide. Medium Blue,
which was recently named the number one search engine
optimization company in the world by PromotionWorld, serves
local and national clients, including Boston Scientific,
Cirronet, and DS Waters. Visit MediumBlue.com to request a
custom SEO guarantee (http://www.mediumblue.com/seo-guarantee.html)
based on your goals and your data.
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