Are paid ads or SEO better for lead generation?

Paid ads are a great way for you to get results in the short term.

You can get targeted traffic to your website from day one, but it comes at a cost.

On the other hand, SEO can bring you traffic to your website for free, for long periods of time.

So in other words, if you stop spending money on SEO, you still get the traffic. And if you don’t pay an agency you can do it yourself for free.

So before we dive into which one has better return on investment, let’s take a look at the pros and cons of each of them.

Pros of paid ads, 

Fast results. As soon as you start the campaign, you can start getting clicks.

The data that you get from the campaigns is amazing and you get the data fast.

You can get a clear picture of which keywords are working, what are best for you from a demographic standpoint, geography standpoint and that way you can optimise for that in real time.

With paid ads, you can have as many options with targeting as you want.

From not just being state-based, you can also target city specifics or country specifics, even within a certain radius of your business. Not only that, you can personalise almost each in every single area of your segmentation. That allows you to fine tune relevant messaging, according to each form of segmentation. And that’s easy to do with paid ads.

Pros of paid cons, 

You have to spend money, or you’re not really going to get anything from it.

That’s the sad part.

Needless to say that if you don’t have the money to spend on ads and ads aren’t for you.

Well that’s okay, but keep in mind, some ads are highly profitable. If they weren’t, people wouldn’t keep doing them. And if you’re willing to just spend

a little bit of money up front, or you sign up for some of those hosting companies that give it to you for free, you’ll be able to figure out really quickly, if you can generate money from your paid ads.

Here’s another con.

Even though you’re generating revenue from it and you can scale up really quickly, it typically starts costing more and more money as you scale up.

I’m not talking about spending more money. Of course, you’re going to spend money because you’re scaling up. But your cost per lead, your cost per visitor, your cost per conversion, it keeps typically going up as time goes on when you’re scaling up or time just goes on.

You know, if I go back 10 years ago, CPCs were really cheap.

Now they’re expensive.

Heck next year, even more expensive.

Heck, during COVID, things still went up in cost.The cost per customer continually goes up. And you need to keep spending more money

to acquire customers over time.And that’s why you have to optimise your funnel.

Now for SEO.

1. First off SEO is scalable. 

Once your efforts start paying off, they usually keep paying off. As long as you just keep doubling down and doing the right things, or at least put on maintenance mode.

SEO results tend to compound more over time. And the more authority your website gets and the more authority you have in the space, the better off you’re going to do.

2. SEO works 24/7.

The different about PPC and SEO is the moment you stop paying, you don’t get any more leads and traffic. With SEO, you keep getting that traffic.

And you don’t need to add extra budget to keep your campaigns on daily.

3. SEO is very profitable.

A study conducted by Forrester Consulting in 2020 showed that the customer lifetime value is higher with SEO traffic than paid advertising. And SEO is more engaging and creates much better brand loyalty in the long run.

The cost per acquisition is much lower than paid media, which makes SEO very attractive in the long run.

According to HubSpot, 61% of B2B marketers stated that SEO and organic traffic generated more leads than any other marketing initiative.In other words, it gets more clicks.

According to WordStream, Google Ads gets an average click through rate

of 3.17% on search and 0.46% on display. In comparison, a study by my buddy, Brian Dean, back in 2019, the number one result in Google’s organic search gets an average CTR of 31.7%. And recent data that Neil Patel pulled up from Ubersuggest shows that it’s still above 24 for most keywords on a global basis.

Now let’s go over the cons.

First off, it takes time. You want results right away, not going to happen.

You want results within three months! You may get some, but not what you’re looking for. And it’s super competitive and it’s getting more and more competitive because it produces a higher ROI.

The other issue with SEO is the SEO traffic doesn’t convert as well.

Remember, to rank really well in Google, you tend to have to write lots and lots of content. Those pages don’t convert as well versus the page that says, oh, looking for auto insurance? Put in your post code or your address

and click the next button. You can’t really do that with SEO.

You actually have to create content on the page.

Google can abruptly also change their algorithm and rules, which can really hurt your SEO, with a snap of their fingers. Google has done thousands of algorithm updates. They never released the number, but it’s a lot. They’re releasing changes daily. You just don’t about them because most of them are small, but when they release the big ones, boom, with the snap of a finger, you can get impacted.

And that’s a crappy part about SEO.

But if you do it for the long haul, you build a brand, you do what’s right, you shouldn’t have too many issues.It doesn’t mean you won’t get fluctuations, it just means you shouldn’t have too many issues.

So which one has the best ROI?

Paid ads versus SEO?

Well, I’m going to illustrate this in the context of search. Let’s take an example of a keyword location.I live in Las Vegas, Nevada. And let’s say I’m a realtor and I want to get people to check out my apartment listings

and I could be bidding for keywords like Las Vegas apartments.

According to Ubersuggest,

this keyword gets searched 33,100 times per month and cost $1.26 per click on Google Ads. If we take WordStream’s benchmark that I mentioned before, and were running ads for this keyword, I can get an average click through rate (CTR) of 3.17%.

That means I could be getting roughly 1050 clicks per month, which would be costing me around $1,320 a month.

Now, according to the same research by Wordstream, Google Ads get an average of 3.75% conversion rate, which means that out of those 1050 clicks, I would be getting 39 leads.

If you crunch the numbers, you’ll find that I’m spending an average of $33.85 to acquire a leadto my apartment listings. Bear in mind, that out of those leads, I may not even close every single one of them or even one of them. But assuming you fine tune that, you should be good.

If I want to increase my spending, and my target to additional keywords, I may even spend double, triple, quadruple that per month. 

Now this is only viable as a temporary solution or something that we’re doing in conjunction with SEO, while you’re ramping that up.

If I were targeting the same keyword in SEO and I end up ranking number one,I be getting roughly 10,493 visitors a month. That equates to almost $13,221 in paid ad traffic value each and every single month.

So yeah, it could take some time to get to page one or even rank number one, and you may not get there.

But there’s a massive ROI on SEO and better than pay-per-click. But here’s the thing, I don’t look at pay-per-click as something that you just do until you ramp up your SEO.

If you’re spending $1 on pay-per-click and it makes you $2 or $5 or $10

and is profitable after your costs, why wouldn’t you keep doing it? You should keep doing both over time. 

Focus on SEO for the long run, paid ads on the short run and long run, but you need to be doing both.

The ROI is better in SEO, but it doesn’t mean that there’s not an ROI in both. So don’t worry if the ROI is lower in one versus the other, you could be doing both.

If you need help with either SEO or Paid Ads, just email me at fred @ moremarketingideas.com and let’s setup a time to have a chat so I can understand your needs and come up with a plan of action specifically for your business.

Cheers,

Fred

We provide SEO and Paid Ads management service in Melbourne, Sydney Adelaide, Perth, Darwin, Canberra, Brisbane, Georgetown, TX.

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