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Paid Ads vs. SEO: Which One is Better For Lead Generation?

By April 5, 2022May 5th, 2022SEO
Business man comparing paid ads vs SEO

Businesses can generate tons of leads through different channels, but no channel is equal to the other. 

You have the formidable task of balancing the cost, maintenance, and results of a lead generation campaign to select the best option.

For the most part, the solution stems down to two marketing strategies:

  • Paid ads
  • SEO

One question, however, brings everything into perspective:

Between paid ads vs. SEO, which method suits your business’s lead generation campaign?

Paid ads are excellent in generating short-term results because you start to get targeted traffic to your website from day one. 

The only problem is that you’ll pay per click.

On the flip side, SEO is excellent in generating leads for free in the long term. Even after you’ve stopped investing in SEO, it’ll continue to generate leads for your business. 

SEO is free when you don’t pay a digital agency to get you traffic from search engines. However, it takes time.

To establish which method suits your business’ lead generation campaign, Let’s examine the pros and cons of paid ads and SEO and descriptive statistics.

Paid Ads as a Lead Generation Strategy

Advantages of Paid Ads

Paid ads are a search engine marketing strategy where your business pays when someone interacts with your ad. The strategy allows your business to run highly targeted led generation campaigns, increasing the chances of success. 

With paid ads, you can target an audience based on location, demographics, household income, and even age.

On the search engine, paid ads appear on top or below organic search results for a keyword your business bids for. The amount you’ll pay on a PPC ad depends on your industry and the keyword’s search volume.

The biggest advantage of paid ads is that they’ll help you stay competitive on search engines even when your market is crowded. Ads quickly get your business in front of your target customers even when you don’t have the domain authority to rank your site organically on Google.

Paid ads have many advantages, but let’s focus on how they’re excellent for lead generation.

#1. Gets Fast Results: Once You Start a Campaign, You Start Getting Clicks

As soon as you start the paid ads campaign, you get clicks. Unlike organic or free content strategies, paid ads drive results almost immediately. 

Even though the clicks you get may not be profitable, you’re likely to reach thousands of people searching for your business’ product or service.

Statistics say that a third of people use the internet to search for local businesses. Your business gets exposed to a huge pool of potential traffic, especially when bidding for the top relevant search engine result.

More importantly, the data you collect during a paid ads campaign is critical. The data give you a clear picture of:

  • Which keywords are working
  • What keywords are the best for you from a demographic standpoint
  • What are the best keywords from a geography standpoint

You can use the data to optimize your campaign in real-time.

Even though paid ads aren’t the best way to acquire leads, they are an extremely effective short-term tactic.

#2. Paid Ads Appear on Top of Organic Ranking

When running a paid ad on the search engine for a keyword, your website would appear on the top position of the search engine result page. The ranking makes your target audience see your business even before scrolling to see other results.

Sometimes, even when you’re number one in the organic position for a specific keyword, users will still see the paid ads first before seeing your result.

Users are more likely to click on ads on top without even glancing at the first organic list. 

Even if you’re ranking top for a keyword and claiming the majority of traffic, you’re more likely to claim even more if your business has a paid ad on top of the organic listing.

#3. Paid Ads Have Multiple Options to Target Ideal Audience

Paid ads give you as many target options as your business might need. You can target:

  • People from the specific geographical area
  • An audience of a particular age
  • Customers of a particular age
  • Consumers with specific interests

These targeting options are crucial. For instance, most first-time visitors won’t work on the landing page on paid ads. According to WordStream, your paid ads will likely convert 4.40% of first-time visitors.

The retargeting option allows you to engage with 95% of the audience that didn’t convert.

You’ll have access to people who have visited your site and serve them with ads accordingly.

Your business can then re-engage and encourage those visitors to convert.

#4. Algorithm Changes Don’t Affect Paid ADs

Every competitor is working to rank for the coveted top position of search engine. Everyone creates perfect content, utilizes the best SEO strategies, and monitors search engine algorithms for updates that can alter their ranking.

Any major change in search engine algorithms can impact SEO ranking.

Unlike SEO, paid ads aren’t as risky. Your success metric is independent of Google’s algorithm. You’ll only pay depending on the clicks and the position of your ad on the search engine.

Cons of Paid as a Lead Generation Strategy

Paid ads have their shot-coming. Here are some of its cons.

#1. You Must Spend Money or Get No Leads

If you don’t have money to spend on the ads, then paid ads aren’t for you. Unless your business has a huge budget for marketing, it’s nearly impossible to sustain a long-term paid ads strategy.

Your business pays every time someone clicks on your ad with paid ads. If your business goal with the campaign is to boost traffic and remain on top, you’ll incur a lot to just stay on top of Google.

However, some ads are highly profitable.  If you’re spending a dollar on the ad, and it makes you $2 or $6 or $11 and is profitable after your costs, you should keep doing it over time. 

If you’re willing to spend just a little bit of money upfront, or you sign up for host companies that give you paid ads for free, you’ll figure out if you can generate money from paid ads.

#2. You’ll Spend More Money as You Scale Up

Even though you can generate money from paid ads and scale up quickly, you’ll start spending more money.

 It isn’t about spending more money — and honestly, you will — but your cost per lead, visitor, or conversion keeps going up with time, whether you’re scaling up or not.

For instance, ten years ago, CPC was cheap. Today they’re more expensive and will even be more expensive next year.

The cost per customer continues going up, and you’ll need to spend more money to get customers over time. 

No question, paid ads are among the most effective digital advertising when you launch them strategically. Paid ads can help you reach more qualified leads and revenue in a short period.

However, let’s compare it to SEO.

SEO as a Lead Generation Strategies

SEO compared to Paid Ads

Search engine optimization involves enhancing your business site visibility to boost its ranking on search engines to gain organic traffic from search engines.

Boosting your business’s search engine ranking increase the chances of your target audience getting you by searching a keyword related to your services or products.

61% of the marketing world says that SEO is the top inbound marketing factor. However, the question that brings everything into perspective is:

How great is SEO in lead generation?

To answer that question correctly, here are some of its advantage.

#1. SEO is Cheaper in the Long Run

Yes, SEO costs time and money — paying SEO agencies, tools, and freelancers. However, it’s cheaper in the long term.

When your business has content ranking and driving leads to your site, you won’t need to run paid ads to make customers see it. Unlike paid ads, your won’t spend a dime when customers click on your site that ranks on the search engine.

More importantly, organic traffic is scalable.

Once your business starts seeing SEO results, you’ll keep getting more as long as you keep doubling down and doing the right thing.

In other words, SEO results tend to compound more over time. The more authority you have in your industry, the better you will do. 

#2. SEO Traffic is More Stable

The difference between PPC and SEO is that you don’t get any more leads and traffic the moment you stop paying. 

With SEO, once you rank on the search engine, you keep getting that traffic without adding extra budget as long as you keep optimizing it.

Interestingly, SEO has no off-and-on switch. You own your traffic, and your business website will not stop appearing on search results even if your budget dries up.

#3. SEO is Highly Profitable

According to a study by Forrester Consulting, a customer lifetime value is higher with SEO traffic than with paid advertising.

SEO is more engaging and creates much better brand loyalty in the long run. The cost per acquisition is much lower than paid ads making SEO attractive in the long run.

HubSpot says that 61% of B2B marketers generate more leads through SEO and organic traffic than any other marketing strategy.

With SEO, you can create different types of content such as case studies, guides, and blog posts for the target audience at different stages of the sales funnel.

As a result, SEO gives your business a better shot at getting leads to the next step in the funnel each time they browse yot content.

#4. SEO Get More Clicks

According to WordStream, Google Ads gets an average click-through rate of 3.17% on the search and 0.46% on display. 

On the flip side, Backlinko found that the top organic result on Google gets an average click-through rate of 31.7%.

Appearing consistently on a search result for keywords that relate to your product or service helps you build trust and brand authority with your target audience.

More importantly, consistent ranking shows the search engines that you’re an expert in your industry, leading to more backlinks from trusted sites. Backlinks are a ranking factor.

Cons of SEO as a Lead Generation Strategy

Some reasons make SEO not a great way to generate leads. They include:

#1. SEO Takes Time to Give You Results

When you want results right away, SEO cannot make it happen. If you want results within three months, you might get some but not exactly what you’re looking for.

If your business website or domain is new, you’re unlikely to get immediate results from SEO. Multiple factors affect how your business site ranks, and you can’t establish it within the first few weeks or months of launching your business site.

Worst of all, it’s super competitive, and it’s getting more and more competitive because it produces a higher ROI.

#2. SEO Traffic Don’t Convert Well

To rank well on Google, you need to write lots of content. Most of the writing won’t convert well because they aren’t landing pages. 

With SEO, you have to create content on the page.

If you’re not hiring professionals to help you with SEO, you need to understand your audience’s goal and meet them with excellent content to optimize your site for search engines.

You’ll require high-level skills and expertise to run:

  • Technical SEO
  • Linkbuilding
  • Writing
  • On-page SEO

#3. Search Engines Change Their Algorithm and Can Affect Your Result

Search engines change their algorithm and rules from time to time. The change means you need to keep an eye on your SEO strategy and organic result and adjust accordingly.

However, search engines can release big changes in their algorithm, which can hurt your SEO within a short period.

You can have a sudden change in your search traffic, hindering lead generation.

Paid Ads Vs. SEO: Which One Better in Generating Leads

To understand better, consider a keyword location. A realtor firm in Los Angeles wants people to check on your apartment listings.

With paid ads, you might bid for a keyword like “Los Angeles apartment.” This keyword attracts 33,100 searches a month and costs $1.26 per click on Google Ads.

If you consider the WordStream study and run ads for this keyword, you can get an average click-through rate of 3.17%. You can roughly get 1050 clicks per month, costing you around $1,320 a month.

According to the same WordStream study, Google Ads get an average of 3.75% conversion rate, meaning out of those 1050 clicks, you’ll be getting 39 leads.

When you do the math, you’ll find that you’re using an average of $33.85 to acquire one lead to your apartment listing. Out of the 39 leads, you might not even close every one of them or even one.

Assuming you fine-tune your ads, you should be good, and that could be the case with SEO as well. 

If you want to increase your spending to target additional keywords, you might spend even more. Paid ads are only viable as a temporary solution or something you’re doing together with SEO.

If you were targeting the same keyword in SEO and ranking number one, you’d be getting roughly 10,493 visitors a month, which is almost $13,221 in paid ad traffic value every month.

However, ranking on top of the search engine for a competitive keyword isn’t easy.

SEO Rocks, So Does Paid Ads

Yes, it takes time to get to page one or even rank number one, and you might not get there. However, SEO has a massive ROI and is better than pay-per-click.

But that doesn’t mean that you should not do paid ads until you ramp up your SEO. If you’re spending a dollar on pay-per-click and it makes you $2 or $6 or $11 and is profitable after your costs, you should keep doing it over time.

Focus on SEO for the long run and paid ads for the short and long run. You need to be doing them both. Different situations exist where paid ads are better than SEO and vice versa.

Use paid ads when:

  • You want to generate leads fast
  • You’re launching a product that is new in the market and never heard of
  • You want to direct your leads to a sale or landing page
  • You’re running a time-sensitive offer

On the flip side, use SEO when:

  • You have a limited budget to run a marketing campaign
  • You’re targeting to build your brand’s authority
  • You want a long term lead generation solution
  • You want to target leads at different stages of the sale funnel

The ROI is better in SEO, but it doesn’t mean that there isn’t any ROI in both. Don’t worry if the ROI is lower in one vs. the other. You could be doing both.

Whether you choose to go with paid ads or SEO depends on your business’ situation. Take your time to analyze the pros and cons of paid ads and SEO. Then, find which strategy suits your best.

You can integrate both paid ads and SEO to leverage outstanding results for your business. Contact Getknowticed to get help with any of the two.


Author Kevin

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