Online businesses often have a dilemma whether to invest in PPC or SEO. Most companies jump on PPC first. Is it the right approach? Probably.
Startup businesses don’t usually think about marketing from the get-go. There are a lot of other things to take care of: product, logistics, site design, and a thousand of other details. Marketing is not in this list until the moment the site is live.
When the e-store is ready, the drive is to bring users to it in droves. The rationale is clear – after investing months of hard work, we need results. This drive pushes young businesses to jump on pay-pay-click (PPC): Google Ads, social ads. Not bad. But is it enough? SEO may be helpful too.
Let’s start with the basics about PPC and SEO.
PPC or pay-per-click is an advertising model where the advertiser pays only for the click on their ad regardless of how many times the ad was shown. In this model, the advertiser’s interest is to target the right audience with an appealing message. This relevance ensures higher user engagement, which may lead to more conversions. And these conversions can be anything worth to the business: from signups to leads, from purchases and sales prospects.
CPC and CPM
Google Ads and Bing Ads are true pay-per-click platforms. They charge only when users click on your ads. The same is valid for other local search engines like Naver in South Korea or Yandex in Russia, with some local differences. Here we talk about CPC – cost per click.
Video placements, like YouTube pre-roll video ads are based on the PPV or CPV model (pay-per-view or cost-per-view).
Facebook, in its turn, is not a true pay-per-click platform, even if it has a pay per link click option. Facebook advertising uses the so-called cost-per-thousand-impression model (CPM = cost per mille). All pay per click rates are calculated based on the current CPMs. CPMs are dynamic and are built based on the inventory of impressions. The user pool in the targeted audience and the number of competitors targeting this audience influence the CPM levels.
Knowing this difference is useful if you want to understand where traffic is cheaper to get. You can see the calculations below, but we can summarize by saying Search ads are usually more expensive (in the US and Canada). Inventory of available searches is usually lower than impressions on social media platforms.
Cost per Click Calculations
$1,000 in ad spend on Google Ads with the CPC ( cost per click) of $1 will get you almost 1,000 visitors. Yes, almost – clicks never equal visitors. The discrepancy may happen due to many reasons. Here is one: after clicking on the Google ad, the user left the site because the page was slow to load. The click happened fully; the visit was only partial. So the site’s analytics failed to register it.
$1,000 in ad spend on Facebook with the CPM of $9 will result in 111K ad impressions ($1,000 / $9 * 1,000 impressions). With the clickthrough rate of 1%, you will get 1,110 clicks or almost 1,110 users. The cost per click will be $0.90 on Facebook ($1,000 divided by 1,110 clicks).
If both paid channels have the same purchase rates on your e-commerce site, then you may want to spend more money on Facebook ads. You get traffic at a lower cost than Google, which promises more purchases on the site.
In a nutshell, PPC is about using an advertising platform and paying for traffic. The game is to set up your PPC campaigns, create appealing ad copy, build friendly landing pages, and provide a positive user experience on the site.
ROAS is the first go-to metric to assess the paid campaign’s results. ROAS or return on ad spend is the revenue from an ad campaign divided by the cost of the ad campaign. In other words, if your site made $5,000 in revenue on a $2,000 ad spend, ROAS is 2.5. In our campaigns we target 3x ROAS and above, for instance. Other metrics like ROI or return on investment may be added to the toolkit of metrics. We will discuss such additional metrics in a future article.
PPC is quick to set up and it’s easy to measure. On the flip side, it’s costly and it requires a technical skillset to set campaigns up and run them with success.
What’s is SEO?
SEO or Search Engine Optimization is a set of practices and techniques which help increase a site’s visibility in organic search results. These techniques vary in their nature.
SEO can focus on keyword research with the purpose of optimizing a site’s URL structure, category page structure, and on-page copy.
SEO can also help solve technical issues by proposing working solutions. Say, a site has a lot of heavy visuals, which should remain. As heavy visuals slow down webpages, image lazy loading may help improve page load times. Such finds and solutions usually emerge during SEO audits.
SEO can also help with a site’s crawlability issues. Well, search engines are still crawling bots, which need help in navigating a site’s pages.
SEO also works hand in hand with Content marketing. SEO feeds content marketing with research. This helps with new ideas, direction, and focus.
SEO also works to get internal links and external backlinks.
Unlike PPC, measuring the SEO efforts is not as straight-forward. SEO is usually a long-term game. SEO optimizations start showing positive results weeks if not months after their implementation.
Plus, the investment in SEO is not as immediate as with PPC. It goes into SEO consultant fees and internal employee’s time. To keep a good track of these, one needs to document this effort and compare it with the outcome after some time. SEO requires patience and dedication.
SEO is a long-term game. The effort invested today may show results only weeks after.
What’s better PPC or SEO?
PPC and SEO are used with different objectives. But their goal is the same – bring more relevant visitors who will convert into paying customers.
Start with PPC to Learn
PPC brings traffic to a new site and allows to get first sales, initial user feedback, engagement metrics.
PPC has clear routes – it sends traffic where you want it to go – homepage, product pages, landing pages. With PPC you control the flow – boosting the ad spend on the ad groups going to your category pages will bring more users to those pages.
PPC may be expensive. Say, cost per click on certain competitive keywords may go beyond $10/click.
PPC is like a door to a house. You keep the key and you open and close the door as you want.
Use SEO for Long Term
SEO looks more like a snowball. With time and right effort, SEO can start driving streams of traffic to the site. With rich content across your e-commerce site, there will be more visits from organic search. With a constant flow of fresh content, these visits may grow.
The beauty of organic search traffic to a site is that it’s not centralized. Users can enter the site on category pages or blog posts – whatever the search engine serves them as a relevant source of information related to their search.
SEO traffic is almost free. Free – because you don’t pay for it. Almost – because there still was an indirect cost associated with the optimizations and content creation.
A young e-commerce site will probably start with PPC. But SEO should not be set aside. It should happen in parallel.
Investing comfortably in PPC and building a solid SEO base is the winning mix in the game of getting more relevant users to your e-commerce site.
There is no secret formula about how much to spend in PPC and how much to invest in SEO. Start low, see the outcome, continue with optimizations, assess again. Patience with both – PPC and SEO – will be the main virtue. Give at least 2 months to PPC and 3-4 months to SEO to prove themselves.