Marketing your business online can be very confusing and making the wrong decisions can be quite expensive. So how do you make the right decisions to properly implement an online marketing strategy with pay-per-click and organic search engine optimization?

Let’s start by defining pay-per-click and organic optimization. When you search any of the major search engines you will see two types of results. The first results displayed on many sites are pay-per-click ads, also known as “Sponsored Results.” Just as the name suggests, these ads are paid for by the advertiser each time a visitor clicks on them. The advertiser who bids the highest amount for the search term will show up first. Organic results are organized by the search engines' search algorithm (computer program) and their ability to catalog the content on the web (also called “spidering” or “crawling”). These results are not directly paid for like pay-per-click advertising but often businesses invest a lot of time in optimizing their site to show up at the top of the results.

So if pay-per-click and organic optimization both show up in the results, which method is right for your business? A lot of different factors go into determining an optimal online marketing strategy, but the overall goal is to get the best coverage you can for the lowest cost per click (or CPC as web marketers refer to it). Ultimately the maximum CPC you should be willing to spend is also related to your maximum cost per customer acquisition (or CPA). After all, getting clicks with no sales is an expensive way to spend your time. Beyond CPA the dynamics get quite a bit more complicated because ultimately what you’re willing to pay for CPA and CPC are related to a host of other financial factors internal to your business. Before investing in any marketing, whether it’s online or offline, you should know exactly how much a new customer is worth to you (hint: it doesn’t have to include just their initial sale but should include whatever that customer account is likely to be worth over time). Your average cost per customer acquisition should be well below that number or you’ll just be treading water with your marketing efforts.

A common value-driven strategy behind PPC and SEO is to try to achieve natural listings for as many of your keyword terms as you can, focusing first on the terms that are the most expensive to purchase as pay-per-click. Using this model you will achieve broad coverage with natural SEO and can use PPC sparingly as a method to supplement areas where you haven’t been able to gain good natural ranking. Additionally, external sources have shown that conversion rates are often higher among natural listings vs. PPC because buyers trust natural listings to return the best results for their search, not the highest paid.

If cost efficiency and value are not key criteria for your Internet marketing then there are a whole host of other PPC strategies which you can consider. In general these strategies are much more aggressive and take into account the value of branding when considering overall return on investment (for links that aren’t clicked) or simply the value of having complete coverage or domination in a particular market regardless of the cost.

In some cases where PPC terms are very affordable (related to your customer acquisition costs) it may be less expensive to rely on PPC instead of natural optimization. It’s very important to keep in mind that pay-per-click costs will never go away and the cost per click is highly unlikely to decrease. It’s more likely that as competition arrives online in your market, costs will increase dramatically. In order to have staying power in your niche or industry you should have broad coverage with natural listings. As your future competitors infiltrate your market they will have much more difficulty unseating you in the natural results. With just PPC listings your competitor only needs to be willing to spend more than you. Since their overhead will be lower as a startup they’ll be willing to pay more for each customer than you are and still eke out a satisfactory profit.