SEO vs SEM: Which one is better for your business?

So, you want your business to achieve strong digital results, gain market share from your competitors, and deliver the strongest growth for the lowest cost? Then you want to dominate search engines, which in Australia means Google. 

Whilst there are other search engines (i.e. Bing), Google search is by far the dominant medium customers use when actively looking for the product or service a business provides in Australia. The question is what is the best way to generate traffic through search engines?

There are two common pathways: search engine optimisation (SEO) and search engine marketing (SEM).

In this guide, we will cover the key areas, including;

• How do SEO and SEM work within a successful digital marketing strategy?
• Do SEO or SEM deliver the best return on investment (ROI)?
• When deciding between SEO and SEM, which option should you choose to achieve your business’s goals?

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What is search marketing?

Search marketing is the process of driving targeted traffic to your business's website through search engines. Ultimately, you have two ways to do this: through search engine optimization (SEO) or search engine marketing (SEM). The main difference is that SEO is focused on organic (unpaid) traffic, while SEM focuses on results through paid ads.

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Why does search marketing matter?

According to research, search engines dominate website traffic with 68% of all website traffic being sourced from organic traffic and paid ads, vastly exceeding all other channels, including display and social media.

What can search engines achieve for my business?

Search marketing through SEO and SEM can achieve many things for your business performance including;

• Increased visibility and brand awareness
• Increased website traffic
• Generation of leads and sales
• High ROI from marketing spend

For these reasons, it is unsurprising that according to research, search marketing generates 72.2% of new business revenue generated through digital channels.

What results can be achieved through search marketing?

Because of the enormous search volume generated through search results, the opportunity for growth in many industries is virtually limitless. As an example, in our own Cleanawater case study, in which we bought and ran a business for 5 years to demonstrate the power of digital, we achieved the following business results because of the power of search engines;

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SEO vs SEM: Which option should I choose?

Ultimately, the difficult choice for many businesses is choosing the best path to take. Should I choose one over the other, or do both simultaneously? Well, that depends on your business goals. Both SEO and SEM deliver big returns for businesses but in different ways.

So let's take a look at SEO vs SEM, how they differ from each other, their pros and cons, and how you should use them to achieve your business goals.

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What is Search Engine Optimisation (SEO)?

SEO is the process of improving the visibility and ranking of your website in search engine result pages (SERPs), with the aim being to increase traffic to your website from natural, or organic results. 

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What factors impact SEO?

The volume of traffic you generate through organic search queries is dependent on many factors, including;

1. Relevance: How your web page and content match the user's search query.
2. Authority: How popular and trustworthy your website is in Google's eyes. This is determined by things like the quality and quantity of backlinks pointing to your website from other websites and your website's age.
3. User experience: How easy it is for users to find the information they're looking for on your website and how satisfied they are with the overall experience. This includes things like site speed, mobile friendliness, time spent on site, and overall design.

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Search engines understand what users are looking for. This is why Google makes thousands of updates to their algorithm every year, all in an endeavour to drive more traffic to websites that provide a better experience for their users. 

What are the main types of SEO?

A business’s SEO efforts can be broken into three main categories:

• On-Page SEO
• Off-Page SEO
• Technical SEO

Each of the three categories is important to the overall performance of your SEO program. 

On-Page SEO

On-page SEO primarily refers to the quality, user relevancy and depth of the content on your website. It also includes strategies like keyword research and the optimisation of critical elements like title tags, meta descriptions, header tags, image alt text and featured snippets. 

On-Page SEO is considered to be the most important factor in achieving performance from organic search traffic, and in most situations, is where the greatest percentage of a business’s SEO efforts is focussed.

Off-Page SEO

Off-page SEO relates to the popularity and trustworthiness of your website and is determined by factors like the quantity and quality of backlinks pointing to your website from other websites, which is often derived from active link-building initiatives, social media signals and brand mentions.

Technical SEO

Technical SEO has more to do with the architecture of your website and making sure it is easy for search engine crawlers (bots) to index your website pages. Technical SEO includes things like site speed, mobile friendliness, site indexation, proper use of robots.txt and sitemaps, and having a clean and error-free website code.

Why local search engine optimization matters?

Your SEO efforts should include your business's performance in local search results, which includes the maps section in search engine results pages. 

Local SEO is a branch of search engine optimization that specifically deals with optimising your business's online presence to rank higher in local search results, which is important for businesses that rely on customers searching for local businesses.

What is Search Engine Marketing (SEM)?

SEM, otherwise known in Australia as Google Ads (formerly Google Adwords), or PPC ads (pay-per-click), is the process of driving traffic to your web pages through paid search platforms. This means paying for your website to appear in search results. 

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What factors impact SEM?

A business’s SEM efforts that impact the performance of your Google Ads program include;

• The amount you pay per click (CPC), and hence the amount of traffic you can drive to your website through PPC ads, depends on several factors like:

• The competitiveness of your industry: If there are a lot of businesses competing for the same keywords in Google Ads, then cost per click (CPC) will be higher.
• The ‘Quality Score’ of your PPC campaigns: Quality Score is a measure of how relevant and useful your ad, keywords and landing page are to users. The higher your Quality Score, the less you will pay per click, and the more likely you will appear in search results.

• The quality and relevancy of the content on your landing page, and its call to actions, will ultimately impact the rate at which a visitor from your paid ads converts into a new customer opportunity. 

What are the different types of opportunities through Google Ads?

Search Engine Marketing can be broken into three main categories: 

• Search Engine Marketing Ads
• Shopping Ads
• Local Ads 

Each of the three categories has the ability, if applicable, to drive business growth. 

Search Engine Marketing Ads

Search engine marketing ads are the most common type of SEM. These are the text ads that appear at the top and bottom of a search engine results page (SERPs), targeting specific keywords that businesses are bidding on. 

Shopping Adverts

Google Shopping is a form of SEM that promotes product listings and are typically used by eCommerce businesses. These ads appear in search engine results pages with a product image, price and other relevant information, and can be a great way to increase sales from your target audience. 

Local Search Ads

Local search ads are a form of paid search results that targets customers in a specific geographical location. These ads typically appear in SERPs when users search for businesses or services in their area and can be a great way to capture audiences looking for a local business.

SEO vs SEM: Comparing the choices?

When comparing SEO vs SEM there are important factors to consider including cost, which method generates the most traffic, how long until you'll see results, and which one delivers the best value.

SEO vs SEM: Comparing costs

The cost of SEM / SEO depends on the competitiveness of your industry, the quality of your program, and the volume of traffic you are seeking to drive to your business. Here’s how the costs break down for each. 

SEM costs

With paid search your costs include a cost per click (CPC) each time your advert is clicked on, and a management fee if you have a professional managing and optimising your program. 

SEO costs

With SEO, there is no cost from Google to appear in organic search results, as the traffic is generated through the "natural", or unpaid section of Google’s search results. Instead, the cost is in paying a professional to develop your SEO strategy, and create the necessary content to ensure that your website ranks for relevant keywords in organic search results. 

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SEO vs SEM: Which one generates the most traffic?

The simple answer is SEO by far. Of course, there are variations to this based on the search intent of the user, however, across the board, organic search receives the majority of the audience from search engines. 

However, your business’s organic results depend on two main factors;

1. The breadth of keywords 
2. Keyword rankings

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Breadth of keywords

In our Cleanawater Case Study, over a 5 year period, we generated clicks from 36,738 different search terms through Google Ads, which it should be noted is a significantly smaller audience when compared to organic search results. 

As you can see from the below graph, the majority of these search terms generated only 1 or 2 clicks each over the entire 5-year-period. This is why in-depth keyword research is so critical to drive traffic in any successful SEO and SEM strategy. 

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Keyword Rankings

The position of your website ranking has a significant impact on your SEO performance, as recent research covering 4 million search engine results demonstrated.

SEO vs SEM: How long before you will see results?

The answer to this question will again depend on the competitiveness of your industry, as well as the quality and effectiveness of your SEO or SEM program. However, in general, the following is applicable;

• With SEO, it can take several months to see your new web pages begin to appear in search rankings, however, once your website does start to rank for relevant keywords and receive organic traffic, the results can be long-lasting.
• With SEM, your PPC campaigns will start to see results almost immediately, however, the results from SEM are not long-lasting, as once you stop paying for ads, your website will no longer appear in SERPs.

SEO vs SEM: Which one delivers the best value?

Well, that all depends on timing. Both SEO and SEM can be extremely effective in enabling your business to drive traffic and leads to your business, however, in most cases the following applies;

• In the short-term SEM campaigns deliver a better return on investment (ROI)
• In the long-term SEO delivers a significantly better ROI.

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Automotive Industry: SEO vs SEM Case Study

As per the below graph, the business experienced lower SEO growth in the first period, followed by a rapid acceleration in the back few months, with leads increasing by 1,177% over a 12-month period. 

As a result of this progress, the business now generates leads at a 76% lower price point vs SEM ($101 vs $24 per lead), thus delivering a significant commercial advantage.

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Accounting Industry: SEO vs SEM case study

In search marketing, ‘Accounting’ is a highly competitive industry, and hence it took longer to reach the cost per lead crossover point between SEO and SEM. However, as per the below graph you can now see that SEO is delivering leads at a cost that is 62.9% below that of the SEM campaign ($44 vs $116), which represents a very significant commercial advantage for any business. 

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SEM vs SEO: Why does SEO deliver greater long-term value?

There are many reasons why SEO delivers greater long-term value when compared to SEM, but generally speaking, it is for the following reasons;

• SEO has significantly larger audience volumes
• SEO delivers long-term ongoing value that (if done correctly) will continue to grow over time
• Businesses invest considerably less in SEO when compared to Google Ad placements for reasons including;

• There is a better acceptance of the SEM model (i.e. you pay for a click), when compared to the SEO model where there is no guarantee of traffic volumes generated and can often be more difficult to understand.
• A large percentage of businesses focus their digital strategies on short-term results (which SEO does not deliver).
• Many businesses do not understand that SEO compounds over time. For instance your link-building activities today will continue to boot your website’s authority many years down the line.

• Businesses often commence an SEO program with huge short-term expectations and then quit the program when it hasn't delivered results in the first few months.

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SEM vs SEO: The pros and cons?

Both SEO and paid advertising can be extremely effective at driving traffic to your website and increasing sales. However, there are some key differences between the two that you should be aware of before deciding which is the best solution for your business.

Pros and cons of SEO

SEO Pros

• SEO is a long-term strategy that, when done right, can continue to bring targeted traffic through organic search results to your website for years.
• SEO can be a relatively low-cost strategy when compared to paid ads.
• SEO focuses on driving organic traffic from search engines, which is often high-quality traffic since users are actively looking for the product or service you provide.
• SEO can help improve your website's overall user experience, which can improve your performance in Google Ads, and lead to more conversions and sales.
• Content generated through SEO in the form of new and different web pages, can often be utilised for other content marketing initiatives.

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SEO Cons

• SEO is a long-term strategy, which means it can take months or even years to see significant results, depending on the competitiveness of the industry.
• SEO requires ongoing effort and maintenance to stay up-to-date with the latest algorithm changes, SEO best practices, and your competitors who will no doubt continue to seek to gain market share of their own.
• SEO can be complex for the uninitiated, and it can be difficult to know where to start and how to measure progress.

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Pros and cons of SEM

SEM Pros

• SEM strategies are a fast way to drive targeted traffic to your website.
• Your ad campaigns through SEM allow you to specifically target audience segments who are actively searching for the product or service you offer (otherwise known as user or search intent).
• You only pay when someone clicks on your ad, which means you only pay when generating an audience.
• SEM provides valuable keyword research insights for a business’s SEO program.

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SEM Cons

• SEM is a paid ad spend strategy, which means you have to continuously invest to see results.
• SEM can be complex, and it can be difficult to know where to start and how to measure progress.

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Using SEO and SEM together

While SEO and SEM are two separate strategies, they can be quite complementary of one another for numerous reasons including;

1. SEM can drive your business's short-term lead demands whilst you are building your long-term SEO performance.
2. Whilst SEO can build the long-term foundation for new client generation, SEM has the flexibility to deliver short-term performance increases as a business opportunity and/or demand arises.
3. The performance improvement to your website that SEO delivers will also assist SEM performance.
4. SEM enables you to conduct short-term tests into opportunities identified through keyword research, which can then be utilised in building your long-term SEO strategy.
5. Assisted Attribution: In industries where your audience is undertaking a higher degree of research before making a buying decision, SEO and SEM can work together to ensure you don’t lose the lead opportunity throughout their journey.

The other benefit of utilising SEO and SEM together is that for high-converting keywords, you can capture the largest percentage of the market, which any business with high growth goals would want. 

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Our verdict

SEO and SEM can both be extremely effective at driving traffic to your website and increasing sales. The reality is that they can both deliver high ROI for your business, just in different ways, and they both complement each other very effectively.   

In relation to which option is best for your business, that depends on your business model, industry and goals. However, in general, the following advice would apply;

• If you have the capacity to grow your business, and are seeking high-growth opportunities, both short and long-term, then you should look to maximise your search traffic and combine SEO with paid traffic.
• If your business is seeking short-term growth then SEM is definitely the program for you.
• If your business is seeking the highest ROI and is willing to focus on developing long-term strategies, then SEO and generating audiences through organic results should be your key focus.

Ultimately I believe that the decision comes down to growth for your business. If both SEO and SEM are delivering your business profitable growth, then it makes sense to incorporate both digital marketing strategies into your business plan.

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