In part two of my Bandaid series, I want to take a look at businesses, particularly SMBs that believe that PPC is the best way (financially) to get quality traffic to your website.  Then I’d like to compare some stats, such as long term vs short term investment.

First, let me say that I’m not an anti-PPC guy.  I’ve seen a lot of good businesses do quite well in the PPC arena.  Most of these businesses have the funding to create a nice campaign, and can keep up with the ever-growing costs related to PPC.

For the other 95% of SMBs, pay per click is nothing more than a short term solution – one that won’t stick.  Let’s create a fictional company and hash out some numbers.

Our company – ZXYWidgets, is a small operation; Mom and Dad run the retail store most days and they have two full time salesmen.  They sell blue widgets to a select local market.  Their current reach is maybe 50 miles radius from their store.

Scenario One

One day, Dad gets a postcard from Yahoo! offering them a $25 credit towards setting up a PPC account.  Dad has heard about the Internets and has been wanting to expand for a little while now, so he tries it out.  He has no formal keyword research, and has no idea what analytics are.  So he just types in some words, puts up a poorly written ad or two and sets up his credit card with a $200 monthly limit.  He then proceeds to watch his $200 go down the drain in just a matter of days.

Scenario Two

In this case, Mom and Dad have heard a bit about PPC, and have even been exposed to SEO through a friend or local web design firm.  They have done a bit of keyword research, and have a decent list of words they’d like to target.  They’ve written some fairly decent ad copy, and have settled on a one month test budget of $1000.  Their average keyword costs $1.00/click.

During the month, they see some nice traffic to their site.  They can view their analytics and see the jump during the month.  Within less than thirty days, their $1000 is gone.  Immediately their ads stop showing, and website traffic goes back to near zero.

Two outcomes: Either they made money off that $1000 or they didn’t.  It’s a bit of a crap-shoot.

And the worst part – as soon as they stop spending, everything comes to a halt.

Why SEO is a Smarter Investment

…for most businesses.

The residual effects of any SEO campaign are phenomenal, and can be felt for months, if not years.  Depending on the amount of competition (or lack thereof), you could rank for a nice term and hang onto it for some time.  A simple link building campaign will provide ongoing ‘juice’ to your website even after you’ve gone through your budget.  Spend that same $200 or $1000 over a month or two and you’ll see nice revenue for an extended period of time vs. what you’d see with PPC.

Summary

I want to make it clear again that I’m not against PPC.  For some business models, it is the way to go.  For most, though, it’s a costly bandaid on a poorly created and managed website.

Interestingly, I’ve seen scenario two play out on an even bigger scale, with monthly PPC spending in the tens of thousands per month.  Even some of these big spenders are realizing that SEO is far more attractive and provides a much better ROI over the long term.

So, my suggestion: Use PPC to ramp up your traffic, but use SEO as the backbone that will keep the traffic coming. Then wean yourself off the PPC (unless its converting well, and you can afford to supplement the organic results with your ads).