SEO vs PPC: A model to determine the most effective digital marketing budget division

Abstract

Many search engine marketing campaigns channel most of the budget towards pay-per-click (PPC) schemes, with a small fraction going towards search engine optimisation (SEO). This research aimed at finding the best way to allocate a marketing budget across these two platforms. Firstly, a comparison was made between high-ranking websites to see how PPC and SEO respectively have been applied. It was found that an investment in SEO was seldom made. Secondly, the cross-over point between expenditure on the two systems was determined in a case study. It was determined that the website traffic crossed over after around three months, and the expenditure after six months. From this point onwards SEO became more cost- effective. Finally, the cost per acquisition (CPA) was determined for both PPC and SEO. Results show that the CPA for SEO was significantly lower than for PPC, in all the test cases investigated. In conclusion, a dual approach is proposed. A model was designed, which could be applied to design a cost-effective search engine marketing strategy. When applying this strategy correctly, expenditure will be reduced and yield increased.