Advantages & Dis Advantages of SEO and SEM

Posted on 8:53 PM by Srinivasan Mohan

Few would argue that SEO is potentially the most important search marketing approach for marketers since most searchers click on the natural listings.

Indeed, research shows that some searchers NEVER click on the sponsored listings. Others still don’t realise these links are paid-for.

Generally, the 80:20 rule holds true with 80% of the clicks on natural listings and 20% of the clicks on the paid listings as suggested by the first Stats box earlier in this section.

A key benefit of SEO is that it is relatively cost-effective since there is no payment to the search engines for being placed there. This is particularly important for the ‘search head’, the high-volume, low-intent phrases shown in Table 1 which can be expensive in paid-search. But it can also be useful for generating visitors on the long tail of search shown in Figure 7. Many companies bid on these phrases through paid-search, so giving opportunities for those who use an SEO strategy for the tail.

Additionally, the cost of SEO is relatively fixed, independent of click volume. Effectively, the cost per click from SEO declines through time after initial optimization costs and lower ongoing optimization costs. Conversely, paid-search is essentially a variable cost.

So, there are no media costs, but resources are necessary for key phrase analysis and to complete optimization on the website pages.

Together with paid-search it can also offer a highly targeted audience – visitors referred by SEO will only visit your site only if they are looking for specific information on your products or related content.

Disadvantages of SEO

The challenge of SEO is that there are over 8 billion pages in the search engine indexes with your position in the SERPs dependent on a constantly changing algorithm which is not published. So making your pages visible may require specialist knowledge, constant monitoring and the ability to respond.

As a consequence, the biggest disadvantage of SEO is a lack of control. You are subject to changes in the algorithm.

There are other possible issues. You may be prevented from competing on a level playing field, because competitors and even affiliates may use less ethical black hat SEO techniques.

In competitive sectors it may be very difficult to get listed in the top few results for competitive phrases. This is when PPC may have to be used, although this can be expensive in a competitive sector.

This lack of visibility makes it difficult to make a definitive business case for SEO, although it is fairly obvious what a sought-after number one position on Google would do for most companies.

It is nevertheless impossible to predict and guarantee positions and click volumes from SEO, because the impact of future changes to the algorithm is unknown. Ditto competitor activity – you don’t know what they’ll be doing in future.

So, for a given investment of £1, $1 or €1 it is difficult to estimate the returns compared to paid-search, or indeed traditional advertising, or direct mail, where more accurate estimates are possible.

However, we will see that estimates of long-term returns from SEO can and should be made.

Key recommendation 3. SEO is a long-term strategy. To identify the correct investment requires a long-term cost/benefit analysis. If this doesn’t occur, SEM strategy is often imbalanced in favour of SEO.

Technical disadvantages?

Technical constraints may also limit your SEO capabilities – for example, if there is not the right IT resource, knowledge or technology available to implement the changes to site structure and content mark-up needed for SEO.

For example, websites created entirely using Flash cause readability problems for search engine robots, so onsite optimization is somewhat redundant.

Content disadvantages?

There is a clear need for better education among content authors. They need to know what keyphrases to use, and where to use them, whenever they add and update content.

Balance is required when authors create pages, since they are being created for both search engines and humans.

Copy and language which is effective for SEO can be different to naturally written copy, although the search engines seek to identify and reward natural language. There needs to be a compromise and subtle balance between the two so that pages are intelligible to users, but are also great search engine fodder.

The mantra is to write for users, but to label content accurately for Googlebot.

Because of these problem areas many companies focus their online marketing strategy on PPC. Ad buying and planning remains the staple diet of marketers, so buying PPC ads comes naturally. Indeed, PPC is often the first step into the world of search for many ‘offline’ marketers, the lowest hanging fruit. ROI from paid-search can be excellent, but you mustn’t allow these potential problem areas – or the ease of buying PPC ads – to distract you from the joys of organic search optimization.

Key recommendation 4. SEO is not purely a technical discipline to be conducted by a specialist team or agency. It requires a different style to traditional copywriting which requires training of content owners and reviewers.

Paid-search advantages

• Predictability. Traffic, rankings, returns and costs tend to be more stable and more predictable than SEO. It is more immediately accountable, in terms of ROI, while SEO can take much longer to evaluate.

• More straightforward to achieve high rankings – you simply have to bid more than your competitors, although Google also takes the Quality Score of your ad into account. SEO requires long-term, technically complex work on page optimization, site restucture and link-building, which can take months to implement and for results to occur.

• Faster. PPC listings appear much faster, usually in a few hours (or days if editor review is required).

• Flexibility. Creative and bids can also be readily modified or turned off for particular times. The results of SEO can take weeks or months to be achieved. (Content modifications to existing pages for SEO are usually included within a few days). PPC budgets can also be reallocated in line with changing marketing goals (eg: a bank can quickly switch paid-search budget from ‘loans’ to ‘savings’).

• Automation. Bid management systems can help financial predictability through using rules to control bidding in line with your conversion rates to reach an appropriate cost per sale. However substantial manual intervention is required for the best results for different search ad networks.

• Branding effect. Tests have shown that there is a branding effect with Pay Per Click, even if users do not click on the ad. This can be useful for the launch of products or major campaigns.

Paid-search disadvantages

• Competition. Since Pay Per Click has become popular due to its effectiveness, it is competitive and because it is based on competitive bids it can get expensive. CPC/bid inflation has led to some companies reducing PPC activity. Some companies may get involved in bidding wars that drive bids up to an unacceptable-level – some phrases such as ‘life insurance’ may exceed £10 per click.

• Higher costs. If SEO is effective it will almost always deliver a lower CPC.

• Favours big players. For companies with a lower budget or a narrower range of products on which to increase lifetime value it may be not possible to compete. Large players can also get deals on their media spend through their agencies.

• Complexity of managing large campaigns. PPC requires knowledge of configuration, bidding options of the reporting facilities of different ad networks. To manage a PPC account may require daily or even hourly checks on the bidding to stay competitive – this can amount to a lot of time. Bid management software can help here.

• Missed opportunities. Sponsored listings are only part of the SEM mix. Many search users do not click on these, so you cannot maximise the effect.

• Click fraud is regarded by some as a problem, especially in some sectors. Click fraud is covered in detail in the E-consultancy Best Practice guide to Paid-search, to be published in the summer, 2006.

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