Your Online Marketing Budgets are Wrong!

In the last post I was discussing PPC budgets.  It is easy to think of PPC as the only thing to be included in online marketing budgets, but that is not giving the full picture.  This site is all about SEO training.  Some think of SEO and PPC as being interchangeable.  They are in reality two quite separate topics.

SEO can be seen as a gamble by companies when compared to PPC

SEO can be seen as a gamble by companies when compared to PPC

I found some stats the other day about budget spends on SEO/SEM(PPC).  The results were quite startling.  In general, over 85% of an online spend is on PPC ads, most notably Google Adwords.  This leaves less than 15% of the budget allocated to SEO.  In this instance, when I refer to SEO I am talking about organic Search Engine Optimisation.

This doesn’t seem like a big deal until you realise that only 14-16% of clicks on Search Engine Results Pages (SERPS) are actually on the Pay Per Click ads.

Why are so many companies spending such a high proportion of their online marketing budget on something that only yields 14-16% of return?  Why are they not concentrating on trying to get a larger slice of the 85% or so clicks that are coming from “natural” listings?

The truth is that most companies have tried.  However, only some can be successful, because of the limited number of top positions.  For the sake of the argument, let us assume that success is your site appearing on the first page of results.  Let us factor in normal company politics and in particular the accountants. What is going to happen?

Well firstly, somebody, either from Marketing or from IT is going to mention that some work needs to be done on the companies web presence.  Discussion will take place about what needs to be done.  The answer will be “SEO, and we can try some adwords too”.  The accountants will hear, we need to do some “ghrjldjfsdkhf” and we can try some “alkjwonjaef” too.

It needs to be explained.  SEO stands for Search Engine Optimisation.  It’s about getting the website up the ranks of google.  Adwords are online ads, where you only pay for each click – as little as 8 cents.

“OK, how much is SEO? Can’t the IT dept do that?”

Ah, but the truth is they have probably already tried.  They may even have had some success and claimed that it is not possible to do much better because of company size, the level of competition, the sun being in aquarius etc.  Put on the spot the only recourse is to offer that SEO is an expert area that requires dedicated consultants to push the site even further. (quite true really).

“Ok, so how much does a consultant cost?…”

“How much?????? And what results will they give us.”

Here they are going to be told that nobody can actually 100% guarantee results.

Let’s sum up.  You can have a fully budgeted spend on adwords, where you can measure results and ROI with ease, or you can spend what seems like a lot of money on an SEO consultant (compared with 8c per click) and have no guaranteed result.

What has been forgotten is that approximately 85% of your potential clicks are coming from the SEO work… not the adwords campaign.  Further more, once the bulk of your initial SEO work is done, so is the bulk of the expense.  Adwords keep charging as long as you need them.  SEO can be dropped for short periods of time without the same total loss of revenue.

Invest in SEO training and your IT staff can maintain and even improve your rankings on their own without the need for massive ongoing spends.

I am not against PPC.  Budgeting 85% of your online spend on adwords is not actually sound financial sense though.  It is aiming for catching a minnow instead of a tuna fish, and the spend is not exactly different over time either.

If you are spending 85% of your online budget on adwords, then your online marketing budget is wrong!

About Ian Wortley

Ian is one of Irelands leading SEO consultants with over 8 years experience in the Irish market. Ian discovered his love of all things internet related in 2005 and has been living nearly exclusively online since then, causing much worry to friends and family, but getting great results for clients. Contact Ian: Phone: 01 6854806 Mobile: 086 3817149