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The Benefits of SEO Versus PPC: Who Wins? FIGHT!


Blog Article
I’m the SEO manager at iThinkMedia. I think SEO is awesome. I know a little about PPC, (enough to get by!) but we have a team of dedicated experts in the field so I leave it to them. But that doesn’t mean our disciplines don’t cross-over. In fact, SEO and PPC are intrinsically linked. PPC data can provide a wealth of useful insights when it comes to SEO keyword research, which is immensely useful as Google’s [not provided] tips on average 80% for most sites. So PPC can really help in a research phase, but how can on-going analysis and tests help improve the efficiencies of both channels? Well it would be great to know which channel is best suited to providing the highest ROI achievable.

SEO and PPC: The best of friends:

At iThinkMedia we usually use the “rule of thumb”: use SEO to target high traffic driving, generic keywords and PPC for longer-tail, higher converting terms. The logic would be that bidding on these high traffic driving head terms usually have very high CPC’s and low conversion rates, which could result in huge budgets needed to drive decent volumes of traffic. Using SEO to target head terms, once high rankings have been achieved, will generate traffic at a much more effective ROI. If your SEO agency or in-house team are worth their salt, then they will devise a strategy that will use both channels to improve visibility across both core and long-tail keywords, (with both commercial and research intent) whilst ensuring a healthy ROI from both SEO and PPC.

Brief PPC analysis

Let’s look at an example to explain a little further. Looking at a few generic search terms, I’ve decided to use Russell Athletic for my analysis. (Disclaimer: iThinkMedia have no affiliation with Russell Athletic, however I do remember them being all the rage when I was at secondary school and now they are apparently a sports heritage brand over 100 years old!). Looking at a few popular generic terms, Russell Athletic is bidding on “mens hoodies” showing up in position 8. Google Keyword Planner estimates it would cost £1.79 per click to appear first. Whilst Russell Athletic are unlikely to be paying as much as this (Quality Score depending), things still do not look good for generating a healthy ROI. Theoretically an estimate of £1.19 is more realistic. Using average search volume of 8,100 and ranking in 6th, estimated costs for Russell Athletic to drive 84 PPC visitors is £99.96. Click through rates have been calculated at 1.04% for position 6.

Let’s look at another term that Russell Athletic are clearly trying to target, according to their site navigation:

Russell Athletic achieves PPC position 11 for the term “mens t shirts”. Google Keyword Planner shows a suggested bid of £1.69 in order to rank first in paid results. Russell Athletic is more realistically going to pay around £0.79 per click. Again using our CTR data for PPC keywords and an average position of 10, we can estimate that Russell Athletic receive 43 PPC visitors at a cost of £33.97 from a click-through rate of 0.43%.

Click Through Rates acquired from Smart Insights article. A great blog by the way!

There are of course many contributing factors as to how accurate these figures are, but I am merely trying to show the logic and value behind analysing PPC versus SEO performance. The question the above would raise for me would be how valuable are those clicks? Taking the “mens t shirts” as an example, it could be estimated a 2% conversion rate (average for our retail clients) whilst a realistic average order value for a t shirt could be £20. So for every 100 PPC visits, only 2 convert generating £40. The 43 PPC visitors Russell Athletic would logically receive would therefore only generate £20 in revenue (1 order) from a £42.57 spend. Not great.

So what can SEO do for Russell Athletic?

Russell Athletic does not rank naturally very well for these terms. In fact, they do not even appear in the top 50 for either term. So without going into too much detail, here is a quick list of why they may not be ranking that well from an SEO standpoint:
  • No text on ranking pages
  • Poor use of header tags
  • Poorly optimised title tag’s
  • Slow page load speed
  • Poorly optimised for mobile
  • No use of structured mark-up for products or ratings
  • No external links pointing to category pages (2,966 links from 9 referring domains for the root domain!)
The above list is obviously not the ultimate list to get Russell Athletic ranking on page one, but it would be a good starting point in order for them to have a chance of ranking naturally. With some careful planning and SEO implementation we could forecast the SEO traffic that could be achieved using our own SEO click-through rate data. Estimating a natural ranking of 6th, the situation would look a little different: So again, using the “mens t shirts” example, SEO would drive 304 more visits.

Summary

However, the point to note here is not that SEO can drive more traffic or that PPC is the wrong channel to use at all. It is more a question of, what is the best channel to use for what terms. “mens t shirts” is a very generic term that is inevitably right at the start of the customer purchase journey, so the conversion rate of this term is more than likely much lower than 2% (as used above). If it was estimated to be more like 1% then the PPC figures for “mens t shirts” would be lucky to gain one conversion. Using SEO for head terms will allow you over time to drive customers considerably less cost than PPC. Then the budget saved on head terms can be used to identify longer-tail, higher converting terms. Simple really! So in the fight between SEO and PPC, I’d call it a draw as both need to be used together to harness their full power. Of course there are many caveats to all of the above, but this scenario was written in a purely hypothetical manner. I’d love to hear your thoughts on my little analysis, as I am sure there are plenty of you with differing opinions, which will be very welcomed.

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