The Battle of PPC vs. SEM: Part 1 of 3
by Scott Gardner


Before you began using pay-per-click (PPC) advertising to drive 
Search Engine traffic to your website, how often did you click 
on the Paid or Sponsored Listings? Put yourself in the buyer's 
shoes; clicking on the Sponsored Listings occurs probably 10-20% 
of the time. More often than not, your targeted buyer will go 
straight to the "true" search engine matches, where they can 
find the most relevant websites out of thousands of millions 
of page matches. Take an inter-office poll; ask your co-workers 
to perform a search for an unrelated topic/product/service and 
watch their click-thru trends. The majority of the time, they 
will skip right over the paid results. On the other hand, YOU 
will notice the Paid/Sponsored Listings because you know about 
them and you spent a lot of company resources to put your 
website there. The buyers who have no interest or stake in a 
PPC campaign, just simply overlook these paid listings and are 
conditioned, much like Pavlov's dogs, to go straight to the main 
results.

Now time for the most important question of all: Where is your 
site positioned in the main Search Engine results of Google, 
Yahoo!, MSN, AOL and the other primary search engines that 
receive 90% of all Search Engine traffic?

If your company is allocating a substantial portion of its 
online marketing budget & efforts to the main PPC models, then 
you seriously need to look into getting your website highly 
positioned in the true search engine matches. There are only a 
handful of established, reputable Search Engine Marketing (SEM) 
companies that can deliver the results you need to dominate your 
industry; which can yield greater profits than your PPC 
campaigns. If you are tapping your monthly budgets and not 
experiencing the ROI that you need from PPC, then it is time to 
get your site firmly positioned in the main results of the 
world's leading search engines and reach the majority of your 
target audience, not the minority.

PPC models are excellent for short-term marketing campaigns. You 
can adjust your bids and consequent Sponsored Listing positions 
in real-time. I have clients who do both types of search engine 
marketing. But when you compare apples to apples and oranges to 
oranges, the problems that have slowly evolved with PPC are:

- Your top competitors determine the bids, forcing you to either 
  pay even more for each visitor or completely bail out of the 
  top 3 bids. If you do the latter, then your traffic is 
  significantly diminished; now what's your plan?.

- Paid Listings capture only a small percentage of total
  Search Engine traffic as noted above. Wouldn't it make more 
  sense to target the majority?  

- Many studies have shown that sales conversion rates are lower 
  in the PPC models; averaging about a 1% sales conversion rate 
  for the traffic received from these bid listings.

- It's a very time consuming process to constantly monitor your 
  bids, positions, and traffic. With Yahoo!'s acquisition of 
  Overture, a likely scenario is that the big 4 search engines 
  will have their own PPC models. If this happens, you'll have 
  4 campaigns to manage!

With true search engine listings from SEO efforts, the benefits 
consistently out-weigh those of the PPC model:
        
- Relevance is king when it comes to a user's decision to click 
  on your website. A site appears to be much more relevant and 
  reliable when it is found in the first 10 results of millions 
  of page matches. Google, Yahoo!, MSN, AOL, etc. have deemed 
  your site to be "The One" that best meets their needs.

- Highly effective SEM campaigns should yield acquisition costs 
  of ~$0.07 - $0.15 per visitor (Significantly less than PPC 
  bids). 

- Sales conversion rates can be as high as 10%, but are 
  typically an average of 2% - 4% (2 - 4 times that of standard 
  PPC models)

- Your site will receive the majority of the searching traffic; 
  search engine users are conditioned & prefer to access those 
  listings most recommended by the search engines.

- Once your site is ranked, you can stay there without your 
  competitor manipulating a bid every 30 minutes throughout the 
  day. The literal cost & aggravation of dedicating an employee 
  to monitor your "Max Bid" for many keywords is difficult to 
  swallow.

Put everything into perspective. The Internet is obviously a 
rapidly growing marketplace. As this "child" continues to mature 
and as thousands of new Internet users get plugged in every 
single day, there is a growing audience looking for your 
products or services. Are you willing to use PPC models, which 
have tripled & quadrupled in average bids over the past two 
years, for the next year(s) to come? Longevity, ROI, and making 
the right decisions are key to your company's success.  

A great analogy for SEO vs. PPC is a piece of cake. The main 
Search Engine results should be your foundation & bulk of 
traffic, much like the cake itself. PPC models, email marketing, 
and other traffic-building vehicles should complement your SEM, 
much like the icing on the cake.  

Use true Search Engine results as your primary source for 
website traffic just as more than 1,000 active clients currently 
do with my company. When you crunch the numbers from your PPC 
campaign, Search Engine Optimization makes more sense.    

Stay tuned for Parts 2 & 3 of this series which will break down 
visitor numbers and the value of each visitor to your company 
from both PPC & SEM.


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Scott Gardner is the Director of Sales for WebSourced, Inc 
(parent company of www.KeywordRanking.com and www.ProRanking.com), 
leaders in Search Engine Marketing.  
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