Why SEM is better than SEO

A good SEO is what every company wants for their websites, I mean, who doesn’t want a lot of organic visits? But lately I’ve been hearing people refer to SEO like the best thing to do on digital marketing, and apparently SEO is where you should invest all your time and money. But today I’m going to explain why I prefer to invest more time and money on SEM.

Don’t get me wrong, SEO is great, and is something we should all work on. However, there are many situations in which a paid campaign can give you much more benefit than an organic one.

But before explaining why, I would like to take you through a couple of basic concepts that you need to know before hearing what I have to say.
Most of the time the goal is to get visits on our website in order to provide them a service or product. So we are going to be making money out of that new customer, in one form or another.

The total amount of money we make is called Lifetime Value (LTV).

Good! Now that you know how much you make out of a client, you need to learn how much it costs you to gain that new customer. Let’s suppose that each visit costs you 10 cents, and every 100 visits you make 1 sale. This means you are paying $10 for each new customer (0.10 x 100). This is what we call Customer Acquisition Cost (CAC).

An additional important thing to know is that Life Time Value must always be bigger than the acquisition cost (this of course if you are looking for a profitable company).

 

LTV-vs-CAC

 

Now that you know this you may be thinking “Ok, but if my CAC is really low because I’m only working with SEO strategies, then it will always be smaller than my LTV”. Yes! that’s true, congratulations!

But being honest, a good SEO strategy is gonna take a couple of month to start showing good results, where a SEM campaign is going to show you results from the day 1.

Imagine you are selling ties online and you have just finished your own website, if you wait for the organic visits to start generating sales it could take you up to 3 month to have a sale. Go for a Paid campaign and you are going to start making money right away.

So always remember, SEM is faster than SEO.

Other thing you could be thinking is “Ok, but SEO is cheaper”. Yes!

Once again that’s true and I’m not here to argue that. But think about how many sales are you losing only for having “Cheap” sales. By creating a SEM campaign you are going to be generating even more exposure for your product, so you could be selling even more. You may make less money out of each product you sell, but at the end you will still be making more money all together.

Keep in mind it is not about having a low acquisition cost, but it is about having a profitable business.

Once a personal friend spent around 6 month working on positioning his webpage on an important and really competitive Keyword, only to realise that his sales were coming from other keywords and not from that main one. That was a big punch, he was having visits from that keyword, but no sales at all! So be careful what you wish for.

The other great thing about Paid Advertising is that you can measure your results much faster, so in a couple of days you know if you should stop investing time and money on a keyword or if you should keep going. Think about this next time you are about to spend a lot of time in optimising a particular keyword for SEO. You’re essentially paying for insights into your market, and guess what, that’s often valued much higher than a few cheaper sales.

I have heard people saying “SEO is better because eventually you stop paying for ads”. Check on big companies: big companies are always paying for SEM, and this is because we are in a competitive market. Like it or not, SEM is always on top SEO -visually speaking, at least-.

seo-vs-sem-serps

This means that if a competitor start investing on SEM, they can beat you easily.

But here is a main thing I love about SEM, you can choose when, where and who to advertise. And that’s something SEO can’t give you. Targeting the right audience at the right time could be the difference between generating sales or not from your visits.

That said, I’m pro SEM because I like it and for the reasons given, but I don’t think SEO is worthless or not worth investing your time and effort into. As it depends on the product you’re selling and the industry you are selling to. The ideal situation is to work on both ends together, but if you don’t have enough time, drop me an email and I’ll tell you based on your site and product which channel you should be doing first.

At ThunderMetric we focus on finding the right channel for our clients at the right time. Not only does our insight and experience come into play, but we focus heavily on competitors, data and cost per acquisition metrics. At the end of the day if your digital marketing channels aren’t providing a positive return on investment, they’re unlikely to be able to help grow your business sustainably.

Next time someone tells you that SEO is the best thing, you’ll be able to explain to them that it’s not always the case. If they need further convincing, share this article with them, as we’d love to have a chat on the comments below.