Pay-Per-Click (PPC) search marketing and search engine optimization (SEO) are two different strategies for achieving the same result: driving targeted traffic to your website. There is a common misconception that these strategies are independent of each other, often resulting in a search engine marketer relying completely on method at the expense of the other. Each method has its advantages and disadvantages. PPC drives faster results in terms of pure traffic because you have a tremendous amount of control over everything from the placement to exactly how the search result will appear to the searcher.

The disadvantage of PPC lies in its reliance in one specific factor… your advertising budget. The less money you spend… the less traffic you get. SEO on the other hand is the most cost-effective, long-term solution because after the initial optimization (and some on gong maintenance) your site could benefit from free traffic for an extended period of time. The challenge wit h SEO is that it requires a huge amount of initial research, diagnostics and optimizations to be successful. Even then SEO results are unpredictable because search engines are constantly updating their algorithms, and your competitors may be launching similar efforts to pursue those coveted top spots on the search results pages.

The contrasting differences between SEO and PPC can be leveraged into a comprehensive online marketing campaign. In fact, we often use PPC to monitor the results to help us with our keyword research to prepare our SEO program. With the help of a professional who knows how to leverage both strategies you should be able to drive long-term, cost effective SEO traffic and immediate, targeted paid traffic.

Not all industries are appropriate for paid search. Rather than just provide a list of optimum industries, I wanted to focus on the concept on why some industries provide a better ROI than others.
 
As a general rule, service industries typically provide the best opportunity for ROI. There are however some exceptions where eCommerce websites perform extremely well. Let’s take 2 examples:

Example of a Good choice:
One of our clients sell gourmet mushroom products. This performs extremely well. Why? Two reasons:

• The average customer orders are enough to more than compensate for the total costs per click. That  typically means that either the margins are high enough to absorb the clicks that don’t result in a purchase, or the sales volume or conversion rate makes up for the cliks that don’t result in a sale.
• Because this is a unique product where the consumer only has so many choices, there is a lifetime values to a new customer. That is; once someone finds this store the first time, there is a lifetime of repeat business that will never cost anything again once the customer has been introduced to the website.

Example of a Poor choice:
One of our clients wanted to run a PPC (Pay-Per-Click) campaign to sell laser print cartridges. A few simple questions and a quick analysis determined that would be a losing proposition. Why?

The average profit on a sale was about $12.00 - $14.00. Suppose the average cost per click (CPC) was $2.00 and the conversion rate was 10% (one out of every 10 visitors made a purchase). That means that the vendor would spend about $20.00 to make about $14.00 ( a net loss of about $6.00).

Does that mean that all eCommerce sites are not good candidates for paid search? No… suppose that the majority of those print cartridges were sold in bulk. Then a single click could result in hundreds of dollars in sales.

Conversely, suppose the margin on a single item was extremely high. For example, auto dealerships routinely use PPC to sell cars off their lots. You don’t buy cars online, but you do research on line. A single purchase more than makes up for the investment.

Summary:
When deciding if paid search is a good strategy for an eCommerce site, ask yourself these questions:

• Are the margins high enough?
• Is the potential volume high enough?
• Is there a lifetime value to a new customer