Are marketing managers finally getting the message about balancing PPC and SEO budgets? | SEO Strategy

Are marketing managers finally getting the message about balancing PPC and SEO budgets?

Posted by Louis Venter on May 14, 2009 | Tagged as:

I’ve been banging on about the different budgets spent on PPC vs. SEO, so the latest Hitwise report really caught my eye. For those who haven’t read it, they reported a 26% drop in paid search traffic from last year, albeit in the US. A lot of people will link it to the credit crunch and overall reduced spending and I’m sure that is the case. What I’m really hoping for is that it’s a sign of change in marketing manager behaviour.

PPC seems to be the Linus Blanket for marketing managers. I’m not 100% sure why, apart from it being a certain thing. I suppose if you choose an SEO agency that doesn’t perform it seems like the safe bet. We have internal battles for the cost per visit from SEO and PPC and I’m proud to say the SEO wins the most, by a serious margin. (Navigational/Brand search taken out of course :) )

It was highlighted for me again yesterday while creating a PPC and SEO estimate for client budget approval. The PPC was 3 times the price of SEO and would generate around a 10th of the visits per month. Conservative SEO cost per visit estimate was a mere 18p compared to nearly £5 per click from PPC.

So, leaving the drum behind and focusing on the Hitwise report, are marketing managers tightening PPC budget or comparing the ROI from SEO and PPC and reallocating accordingly?

Obviously, I’m hoping for the latter, as I truly believe that the amount of money spent is massively skewed towards PPC. The last we heard, Google admitted that 80% of all clicks come from Organic search yet, according to the IAB, 80% of all search budgets are spent on PPC. Google isn’t going to keep giving us accurate figures on this and these are a little dated but I can’t see any evidence of this mindset changing on the ground. I keep hearing “My marketing director won’t be happy to move budget away from PPC”.

Perhaps SEO appears to be too good a deal? Maybe it has been sold badly for a long time? There are still “top flight” SEO agencies today that over-hype it to the point that they simply can’t deliver on their promises. We still see an awful lot of bad SEO and promises made by account managers that don’t have the experience or knowledge to give advice.

My only advice to marketing managers would be to stop treating Organic traffic as free. Strip out navigational search and compute a real cost per visit and track it. Compare it to your PPC cost in the light of conversion and bounce rate and measure which is more valuable. If it’s PPC, then so be it. If not then reallocate some budget and test again next quarter. Carry on doing this. If your SEO agency can’t outperform your PPC ditch them and get a new one, it’s not hard to do.

I can only hope that the message is already getting through. Until then I’ll pick up my drum and keep on beating it.

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