Paid Ads VS SEO: Which is Better for Lead Generation?

- You can generate tons of leads
through many different channels,
but they aren't all equal.
The real question is,
is paid ads or SEO better for lead generation?
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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
like mine, NP digital to get you that traffic,
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.
May not always be profitable,
but you can get 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 optimize for that in real time.
And I love the targeting.
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 personalize
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.
Now here's the cons, right?
We went down the pros, there are some cons as well.
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.
But 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 optimize your funnel.
So now let's break down SEO.
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.
SEO works 24/7.
See what's 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.
Heck, it could be Christmas,
you don't have to turn off your campaigns
because no one's managing the phones.
With SEO, you still get the traffic.
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 we 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
because there are cons of SEO as well.
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 zip code or your address
and click the next button.
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,
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 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 lead
to 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.
And that could be the case with SEO as well.
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's 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 of them,
check out my ad agency, NP Digital.
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Thank you for watching.