I’ll Take A $5 Footlong – Half SEO and Half PPC Please

By shanesnow
Published on November 14, 2008

Last month on the SEOMoz blog, Rand talked about the disconnect between PPC and SEO spending, along with about 100 commentators, including semvironment’s CEO, James Zolman.

In his post, Rand poses the question: Why does paid search earn so many more marketing dollars than search engine optimization when organic results get more traffic than PPC ads?

In this post, we’d like to respond to this issue as well as question the assumption upon which the question is made.

Part of the data for the conclusion that most traffic comes from organic listings comes from a study done by Eyetools Eyetracking Research, which shows that out of a study of 50 people, most of them viewed a Google search results page like this:

As you can see, most people looked at the top left corner, with a smaller % looking at the right side. The SEOMoz blog concludes that SEO drives much more traffic than PPC, and several users then debate the reasons why more money isn’t spent in SEO if this is the case.

The assumption behind this conclusion is twofold. It assumes 1) that the triangle in the heatmap moves down to the organic results when sponsored ads are present above the organic listings, and 2) that traffic from SEO converts well enough to achieve a greater return on investment for SEO spending than PPC spending for traffic does.

Eyetools states in this study that the triangle of the most views “appears to include top sponsored, top organic results, and Google’s alternative results.” This would indicate that when ads are shown at the top of the page they receive more exposure than the top organic listings.

So in the screenshot that we see here, there are only sponsored links on the right side, and organic results go all the way to the top on the left. We overlayed a screen shot of a search results page with 3 sponsored results at the top on the left, and drew a box on the heat map where these ads were. As you can see, the majority of users’ eyes would scan the sponsored ads in the top 3 positions most heavily in this case:

So in the case of ads being shown on the left, PPC will get more traffic. This taints the data and the assumption that the SEO is best argument relies on. A more conclusive test would separate search results pages with ads on the left from those without them, drawing heat maps accordingly. This would help us to make some more educated assumptions about the topic we’re discussing.

Additionally, it can be said that traffic from sponsored ads may convert more easily than organic traffic, since many users click on ads with the intention to buy, where organic clicks may be less transactional and more informational. This will definitely vary depending on a lot of factors, and it’s all subject to verification or debate by data from studies, but what I’m saying is that your ROI may not necessarily be greater for SEO spending based on how targeted your traffic may be. Many of you will say “not likely,” but I say “not impossible.”

So who wins? SEO or PPC?

The answer is not to choose one over the other. As James Zolman pointed out,

I [have seen clients'] net income double and triple because PPC and SEO work together. SEO is slower, therefore the expense is lower for these particular clients. They would put more money towards SEO (beyond the $20k-$40k they already spend per month on it) if the results had a wider, faster reach. When they see the return on investment from one set of targeted keywords, they move to the next with the ROI obtained from the previous while leaving some on the table to manage and continue to strengthen their organic rankings. The same goes for PPC – except it is much faster moving, has a much wider reach, and proves a ‘good enough’ ROI to reinvest in it even more. It’s quite scalable… just like SEO, only a little faster for the most part.

Let me tell you about the conversion lift that PPC brings to SEO and vice versa – One company was making roughly $100k/mo from SEO 1 year ago. That seemed to be steady as they ranked in the top 10 for well over 1000 high quality terms. Enter PPC – within 3 months, their new income was at $400k/mo at an expense of $200k/mo on PPC. PPC contributed to doubling their ‘net’ even though the second $100k/mo net was more expensive than that provided by SEO. Their entire net increase could not all be attributed to PPC. We had return visitors, and we noticed that several who clicked on paid search ads would come back via an organic route and vice versa. I would say the doubling of net came because of the natural lift that each (PPC AND SEO) had on the other. Of course, without that added reach and traffic from PPC the SEO may/may not have increased two-fold within 90 days because PPC let us target 10,000+ new keywords/combinations where the company did not have quite the exposure that SEO was currently bringing to the brand/site – coupled with ‘owning’ more real estate for the 1000 or so terms they rank well for.

At the very least, I would never turn off PPC when a client gets top rankings via SEO – the added lift can be incredible. You just have to learn what combination gives you that ROI lift/brand lift. When I say combination, I mean which ad text compliments the organic listing, what position is positive vs negative, when is there a real ROI, etc. It’s all in the analytics. :)

Bottom line for me: SEO is not better than PPC. PPC is not better than SEO. PPC is not easy ‘out of the box’ beyond the surface. SEO is definitely technical. They NEED to work together because they MAKE YOUR CLIENTS MORE MONEY, MAKE YOUR COMPANY MORE MONEY.

And I’d add to that that the more real estate your website listing takes up on the page the better. Whichever investment is more profitable, both investments together are the most profitable. Until you get to the point that your marginal cost is higher than your marginal return, a joint SEO and PPC spending strategy is a great idea. As long as you can make money back from each investment, why not pile them up together?

And of course, PPC is a great way to sustain profits while you wait for your SEO to take effect anyway. :)

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4 Responses to “I’ll Take A $5 Footlong – Half SEO and Half PPC Please”

  1. Andrey (1 comments.) says:

    I had some of the same thoughts as you. There definitely should be a mix between the two with spend being maximized for each based on ROI and goals.

    I also feel that there is room for a new study to be conducted as even that eye study, being from 2005 or 2006, is outdated.

  2. jameszol says:

    Andrey, You’re right – the study is ancient by Internet standards. lol.

  3. » PPC and SEO Compliment Each Other Pay Per Click Journal - Pay Per Click Advertising Blog says:

    [...] money on SEO than on PPC. But Rand’s position is really based on incomplete data as shown by this response from [...]

  4. Eloi (2 comments.) says:

    Those are very valid observations..

    since SEOmoz is mostly aimed towards SEO techniques etc, they do seem to have a high opinion of SEO and not PPC… Which is why their example does not have the premium positions :D

    Plus, in their arguments they forget to mention that in SEO, during that(much longer) time you need to get to the front page, if your SEO consultant makes one little mistake, it can affect/slow your efforts for the next 6 months… but the client will never know about it of course, and continue paying the same price. PPC is super scalable and instant, which makes it the ultimate ROI medium.

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