I get this question all the time. First the advertiser complains that natural search is suppose to not have a cost, that if they wanted to pay to advertise in Google, Yahoo!, Bing or Ask, they would use the CPC model. Then they see the costs from paid advertising after a year and come back asking for help with their natural search engine optimization strategy.

Looking at the table below just makes me tingle all over.

I know what’s going through your head right now, “I really need to invest in pay-per-click”. Well, don’t get too excited. The cost of the CPC efforts on the 2009 results above from this particular account exceed $250k with hard costs and resources. So what looks like $375k in revenue is really around $125k. AdWords alone:

Then there was the revenue from Organic SEO. Link building hard costs (in my experience) average out to just under $16k per year (paid inclusion, content writers, press releases, etc). Dedicated resource managing the link building and many of the tasks that could be done by an SEO Brand Marketing Specialist, can cost ~$35k. Having SEO consulting services lay the ground work and play a role in the monthly reporting and strategy adds an additional $15k or so to the annual expenses, for a total cost of around $66k. Here’s the math:

  • PPC: [(375 – 250))/250]*100 = 50% ROI
  • SEO: [(126 – 66))/66]*100 = 91% ROI

SEO rules again! Notice both produced a positive return on investment. I can only assume that the (none) represented a $150k+ commercial advertisement, which most-likely produced a TON of calls and offline revenue in addition to the direct traffic.

I know I’ll get criticism if I don’t bring it up, so YES a good piece of the organic traffic DID in fact come from branded terms (the company name / product name), which DID most-likely originate from the media campaign.

So why not do a TV commercial and other advertising right out the gate? Well, I personally don’t have $400k to throw around on advertising, do you? If so, go for it. If not, you’re probably like the majority of businesses out there just trying to make it to 2011 unscathed. Yes, there is a $66k cost for a campaign like the above. However, when was the last time you paid an employee their annual salary at the beginning of the year? If your resource left, what would happen to your ranking? Not much if anything. If you stopped buying ads what would happen? That’s right, the revenue would immediate stop.

So is SEO Worth the Cost?

Decide for yourself. If you’re selling a unheard of gadget that does not already have a volume of people searching Google, the media path may be the best starting point for you. However, if you sell common products and popular brands, an organic SEO campaign can yield a fantastic long-term ROI. I recommend continuing to hire additional resources to support the plan architect’d by your SEO Expert until the margin begins to plateau.

Share Your Story on SEO Costs

If you have revenue-tracking enabled and have paid for SEO services, share your story in the comments below.