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SEO vs PPC, How to spend your advertising dollars wisely

A question that we often times get from both existing clients, and prospective clients is “What advantages does SEO have over Pay Per Click (PPC) advertising?”  Many times the clients are already running successful or semi-successful PPC advertising campaigns, and they want to know if it is better to spend their advertising budget on purely SEO, purely PPC, or some combination in the middle.  Our goal at AccelProfit Systems, is to provide our customers with page one placement on Google, for their desired keywords, while saving them money on advertising in the long run.

In my experience there is a pretty simple answer for this.  If your site is not currently showing on the 1st page of Google’s Search Engine Results Page (SERP), but your site is generating new clients for your business through PPC advertising, then you really should consider the following example from an actual customer of ours:

The Widgetmatic corporation is currently spending $10,000 a month of PPC advertising through Google, and their search partners

  • The average Cost Per Click (CPC) for Widgetmatics keywords is $7.75 per click
  • They receive 1,290 visits to their site from PPC advertising
  • They has a 5% conversion ratio, or 64 new clients per month
  • This would be 768 clients per year
  • The cost per conversion is $156

So judging by all the numbers above, everything looks pretty good.  Widgetmatic is spending $156 for every new customer.

However, the problem is that in PPC advertising there is a linear relationship between the amount of advertising dollars that you spend, and the number of new clients that you generate.  This is displayed below

graph of pay per click vs new customers

You can see from the graph that regardless of how much you spend, the number of new customers will be just a fraction of the number of clicks generated.

Now lets examine the case of spending those advertising dollars for Search Engine Optimization (SEO).

Just for some rough numbers lets say that you pay $2,500 for the initial SEO setup, and your SEO contract for your 10 desired keywords is $2,500 a month.  If your SEO is set up and maintained properly you should be showing on Google’s first page, and hopefully in the top 3 positions after 6-9 months.  This puts your yearly advertising budget for SEO at $30,000.

Now lets examine 10 keywords that your site was optimized for.  In this example I will use terms related to plasic surgery in San Diego CA.  Ten terms that you would probably want to be SEO’d for would be

  • plastic surgeons in san diego 6,600 searches per month
  • san diego plastic surgery 6600 searches per month
  • san diego cosmetic surgeon 5400 searches per month
  • san diego breast augmentation 3600 searches per month
  • breast implants san diego 3600 searches per month
  • liposuction san diego 2400 searches per month
  • nose job san diego 1000 searches per month
  • san diego tummy tuck  880 searches per month
  • san diego facelift 590 searches per month
  • san diego mommy makeover 260 searches per month

If you are ranked 1st on the SERPS research shows you get 36% of the clicks, 2nd gets 12.5% and 3rd gets 9.5%.  So lets assume for the 1st three terms you are ranked third, for the second three you are ranked second, and for the last 4 you are ranked 1st. Then you would be generating the following number of clicks for those terms:

  • plastic surgeons in san diego 627 clicks per month
  • san diego plastic surgery 627 clicks per month
  • san diego cosmetic surgeon 513 clicks per month
  • san diego breast augmentation 450 clicks per month
  • breast implants san diego 450 clicks per month
  • liposuction san diego 300 clicks per month
  • nose job san diego 360 clicks per month
  • san diego tummy tuck  317 clicks per month
  • san diego facelift 212 clicks per month
  • san diego mommy makeover 94 clicks per month

So adding up all of the numbers from the above data, you would be generating 3,950 visits to your website in a month.  You should still see a 5% conversion ratio, so this is 196 new clients per month.  If we expand this out to a year, you would generate 2,370 new clients over a year, and your cost per conversion is $12.66.

If we now compare this to the CPC case that we examined earlier, you would generate 1290 clicks per month, which was 64 new clients per month, or 768 new clients per year.

In order for the PPC campaign to generate the same number of visits that the SEO produces from the organic search results, you would have to spend $30,600 per month(at $7.75 per click) or $370,000 for the year.

Lets examine these results over the period of a year

PPC Advertising for 1 year

  • Total cost $120,000
  • Total new clients 768
  • Cost per conversion $156

SEO Advertising for 1 year

  • Total cost $30,000
  • Total new clients 2,370
  • Cost per conversion $12.66

So in summary, had this client chosen to have their site properly SEO’d, and waited for the site to start organically ranking on Google’s SERP, they would have saved $90,000 over the course of the year.  While at the same time only spending 25% of their budget on SEO they would have generated over 300% more clients than the PPC campaign did.

I think its pretty clear that SEO is the clear winner when choosing where to spend your advertising dollars.  PPC has its place, but it is to supplement your rankings while SEO is taking hold, and should only be ran for a set time duration.  Additionally PPC is a great tool if you are running a promotion, and want to start getting clicks immediately.  But for the long haul your advertising dollars are much better spent on SEO.

This article was written by Dr. Garrett Garner, at San Diego based AccelProfit Systems.  AccelProfit Systems performs SEO for all types of businesses, but are highly skilled in the area of medical SEO and SEO for medical sites, including plastic surgeons, and cosmetic dentistry.

 

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