Budgeting PPC and SEO

Developing a search marketing budget for your business

PPC (Pay Per Click) and SEO (Search Engine Optimization) are two methods of obtaining top placement for your website within search engine results. PPC and SEO both differ in their techniques and ongoing monitoring and maintenance. Additionally, the results will vary greatly based on your objectives. As you develop or adjust your search engine marketing strategy and budget, it will be helpful to understand when and how PPC advertising and search engine optimization can work for you. This article will explain the two types of search marketing and how their results differ.

PPC

PPC is the process of advertising your site through the use of pay-per-click advertisements in the search engines. The search engines sell relevant ads to anyone willing to join in a friendly bidding war. By bidding on keywords, advertisers are able to control when their ads are shown. In many cases the sky is the limit on how high the price will go. However, you only pay when the ad is clicked on, making PPC a very budget-friendly advertising option. With each bid, marketers are guaranteed a certain spot on the search engine page. Ads run on a search engine usually consist of a heading, body copy and a display URL. More often then not, the search ad will contain the keyword that was bid on.

• Calculation . PPC is easily measured. Marketers are able to get raw numbers within seconds. Return on Investment (ROI) and Cost per acquisition (CPA) are easy to calculate.
• Cost . You only pay when someone clicks on your ad.
• Speed . Everything about PPC is done fairly fast. The campaign can be running in less than a day.
• Control . You have total control of what the searcher sees when they view your ad or click through to your site.
• Timing. You can set up your ads to only run when you want them to.
• Targeted. You can easily hit your target audience by using the proper keywords and ad copy.

• Expense . A PPC campaign can be expensive it if isn’t monitored correctly.
• Click Fraud . There is always a risk of getting unethical clicks.

The cons of PPC can easily be deterred by careful monitoring. By monitoring your PPC campaign regularly to detect unusual or extreme activity, you can see success in a little as a few days and better control your costs.

Determining PPC Budget

Determining the campaign budget is the first step to designing an effective and profitable PPC campaign. In order to determine your budget, start by identifying how much money you can spend, based upon the monetary value of a click to your website since you are paying per click. The best way to determine your return on investment is to turn on conversion tracking and follow other tips identified in Tips for Enhancing Your PPC Results.

SEO

Search Engine Optimization is generally seen as the more cost efficient way to drive traffic to your site. SEO is the process of “naturally” driving traffic to your site. By making a website more search engine friendly, a site will rank higher on the search engine result page. Site improvements include changing or adding content, improving internal and external links, and formatting meta tags. The most important thing to remember is that content is king. Without enough content containing the right keywords, you have very little chance of ranking well. Used correctly, SEO can lead to a very profitable search marketing campaign.

SEO Pros:

• Time. Rankings can remain long after the optimization has been completed.
• Cost. You don’t have to pay every time someone clicks on your listing.
• Trust . People often trust “natural” listings more then they do paid.

SEO Cons:

• Cost . SEO requires larger up front costs than PPC.
• Unpredictable . Ranking can change quickly as search engine algorithms change or competition increases.
• Competition . Competition can be brutal for certain keywords. Some marketers even resort to unethical practices to ensure they are in the top position.
• Targeting . Targeting is a little trickier, especially geographical targeting, with SEO.
• Changes . Obtaining consistent top rankings will require constant monitoring and tweaks to your site.

Determining SEO Budget

A search engine optimization campaign can be very budget-friendly once it is up and running. Studies show that the long-term results from an effective optimization can reap a better long-term return on investment than other forms of online advertising, including PPC. However, many don’t realize that the initial costs can be very high, and you will need to determine if the up front investment is worthwhile. There is no golden rule for the amount of money to spend on SEO. You will have a unique budget put in place to accomplish your own goals. By first determining your goal, you will be able to get a better perspective on what your budget should be.

Making PPC and SEO work together: Budgeting Options

• For new online storefronts or websites, PPC will drive traffic to your site immediately. Based on your budget, a good strategy will be to start using PPC advertising, invest in SEO as soon as you have the funds to invest in it, and begin to taper off your PPC advertising as your organic listings begin to increase.
• From a recent study at the Penn State School of Information Sciences and Technology (IST), researchers found that on more than 80% of searches, study participants went first to the results identified as "organic." Sponsored links were viewed first less than 10% of the time. A safe bet is to break down your SEO and PPC budget into roughly 70-80% organic SEO and 20-30% PPC. This will help you drive long-term, consistent traffic to your site.
• Set a goal for the amount of traffic you expect to see in a given day. Then, monitor your traffic sources using a quality web analytics program. Turn on conversion tracking code provided by PPC engines like Google and Yahoo!. Information is power. You will begin to see which form of advertising is working best for your industry and your unique situation. When you know where your traffic is coming from and which visitors are converting, you’ll be able to make better marketing decisions.
• Diversify your efforts. Remember that the search engine marketing industry is not limited to these two forms of advertising. Additional options such as blogs, press releases and RSS feeds will help you take advantage of the fact that consumers are first visiting search engines when they are looking to make a purchase.

PPC and SEO can be combined to offer an excellent search marketing campaign. Together they can help to maximize web traffic, capture highly targeted visitors, enhance sales, and generate brand awareness. By budgeting wisely, you will be able to use PPC and SEO to their full advantage.