PPC VS SEO – How to statistically prove that SEO is the way to go and not Pay Per Click
The EngineReady study -> http://engineready.com/company/trafficstudy.html , shows that Conversion rates are higher with PPC comparing to organic and sales/income. The increment is below 2.4 ratio, example for best PPC scenario:
Price of product $10.
100 users will go to the online store through organic and 10 of them will purchase = $100 in sales.
100 users will go to the online store through PPC and 24 of them will purchase = $240 in sales.
Conclusion = a view can be up to 2.4 more valuable to PPC landing pages.
PPC average CTR(click through rate) is 15% – it varies in different markets but it has never topped 20%,
Organic average CTR is 98%.6 – it varies in different markets but it is never below 93.2%, example for PPC best scenario:
1000 users are searching for a phrase 932 are clicking on the organic listing.
1000 users are searching for a phrase 200 are clicking on the PPC listing.
Conclusion = an organic listing will receive 4.66 more traffic than an equal PPC listing.
Combination of examples:
932 users will go to the online store through organic and 93 of them will purchase = $930 in sales.
200 users will go to the online store through PPC and 48 of them will purchase = $480 in sales.
Conclusion = an organic listing is 1.93 more valuable than an equal PPC listing.
**IMPORTANT**
Facts to keep in mind:
• PPC is a competitive market that people are paying to be there, unlike organic results the most of the people are not paying to be there and most of them don’t even try to market their SEO, it is a basic logic fact the a person who is investing money in renting those PPC listings will invest much more effort and funds in the design of his landing pages than millions of small online stores who are not even trying to market their site – usually because of lack of funds. For example:
“sony headphones” has 8 PPC listings and 720,000 organic listings. do you think all the landing pages in the 720,000 organic listings are as good as the 8 PPC?
• An organic listing is like an online real estate property, if you are #1 for sony headphone you can sell you site with those listings for probably a lot of money, you can put ads/adsense on there to make passive income, or you can even hire a manager to run the store for you if the cost/benefit is in the right ratio. In our case it’s like the different between paying mortgage or paying rent, even if you pay for years to PPC – this property/listing is never yours and once you stop paying your listing will stop displaying.
Tom Light.
SEO Consultant,
InfoSearch Media.
310.437.7541
Tom@InfoSearchMedia.com
















































Comment by Shailesh Ghimire on 15 January 2009:
You say:
“PPC average CTR(click through rate) is 15%”
I’m curious to know where you got this number. Would you be able to forward any studies that demonstrate this statistically?
I’m very interested in learning about this.
Pingback by Advanced SEO « ProfitDesign.org on 3 July 2009:
[...] How to statistically prove that SEO is the way to go and not Pay Per Click [...]
Pingback by SEO Articles « ProfitDesign.org Blog on 3 July 2009:
[...] How to statistically prove that SEO is the way to go and not Pay Per Click [...]