Paid, organic and targeted ads are used to drive a website’s traffic and increase sales. These marketing channels are also known as PPC and SEO. Both being parts of Search Engine Marketing (SEM) and are equally as important for your marketing strategy. In this article, we would like to address the budget question, so that you know how to allocate resources invested in SEO and PPC.
SEO vs PPC: pros and cons
Choosing between SEO and PPC, there are several factors to take into account:
- what is your niche and how competitive is it ;
- the tasks you want to solve: increase traffic to the website, increase the number of sales, attract a new audience, increase the amount of branded traffic, stimulate sales in a certain category;
- how much time is booked to implement this task (a week, a month, a year);
- what is the advertising budget you can afford.
Pros: provides more traffic, organic traffic is constantly coming to the website with a long-term perspective.
Cons: search engine algorithm updates will regularly change ranking factors.
Pros: manageability and speed, higher conversion rate with precise settings, only target users that enter the website.
Cons: attracting customers with PPC most often requires a large budget, high CPC in the competitive niches.
Reasons to use PPC
You need to quickly gain traffic & drive sales. With precise settings, you will get only the most interested users, this way reducing your advertising costs.
There are several hypotheses to test. The contextual advertising KPIs are focused on achieving the target action, i.e. conversion. To test various hypotheses, you need a reliable sample of data, which requires traffic. The hypotheses may vary. To test all of these quickly, you can run contextual advertising, and use Google Optimize or conduct A/B testing to quickly evaluate the results.
For example: an online store developed two landing page options for one product category. We ran A/B testing by distributing Google Ads traffic equally to each page. One of the landing pages showed higher results in terms of the number of goals achieved, which allowed us to conclude it is better to use the first version of the landing page for the main advertising campaign and SEO optimisation.
One of SEO’s main disadvantages is changing search engine algorithms. When this happens, the websites that have already been optimised can lose their ranking and traffic flow just in one day. Over time, the positions will recover, but there will be a temporary drawdown. If you place contextual ads, you can rely upon a constant stream of traffic, regardless of Google’s algorithms
You need to stimulate seasonal sales or a flash action. For time-limited offers, contextual advertising suits best – traffic flow starts immediately after the launch of advertising campaigns.
You need to enter a new market. In a new region or country, the audience is not yet familiar with your brand. There contextual advertising will help to show you on relevant queries.
It is necessary to attract targeted traffic to the website (from a specific target audience; at a specific time and day of the week, etc.).
You need to increase sales of seasonal goods. With SEO being less sensitive to such fluctuations, it is not likely to produce tangible results in the short term.
How to calculate your PPC budget
The CPC varies greatly. The more companies compete for a keyword, the higher the CPC. You can calculate your PPC budget by looking at the average cost per click in your niche, the conversion rate, and the desired income.
For example, your website has an average conversion rate of 1.5%. You want to receive an income of $10,000 with the AOV of $50 and an average CPC of $0.8. In this case, the advertising budget will equal $375.
Budget = Income/ AOV/ CPC * Conversion Rate
Reasons to use SEO
If your marketing budget is tight, you should start by promoting your website in search engines. SEO is a long term strategy, but when done right, it can produce consistent long-term results and build brand credibility. If you gain a foothold for certain queries at the top of the search results, you will receive a continuous stream of free traffic 24/7.
Organic promotion is critical for a new website as Google uses the „wait and see“ approach for such websites. Publish relevant content under relevant keywords, place links on third-party trust sites – this will help increase the credibility of the resource, and increase the flow of organic traffic to the website. The same approach is best used when entering a new market.
SEO promotion will also help online stores from highly competitive niches, where the maximum bid for a specific request in contextual advertising is very expensive.
Analyse paid and free traffic in the analytics system. Estimate the number of conversions received from contextual advertising and organic, compare the profit and income from these traffic channels. In some niches, traffic received from organic search can be more converting – meaning, the project needs to invest more in SEO optimisation.
How to balance your budget with SEO and PPC
Planning and allocating your marketing budget depends on the requirements of your project in the short and long terms. PPC advertising can return faster results while SEO promotion will help reach a wider audience and increase brand loyalty. Run a PPC campaign and check which keywords convert better. Only then use SEO to promote them.
In most cases, you do not need to make an either-or choice. When combined, PPC and SEO will bring better results, especially in the long run.
To understand all the intricacies and successfully bring your website to the top with your own hands, you will need to spend a lot of time and effort. We are here to provide help and advise on this matter.