Parallel search engine optimisation and pay-per-click campaigns: A comparison of cost per acquisition

Abstract

Background: It is imperative that commercial websites should rank highly in search engine result pages because these provide the main entry point to paying customers. There are two main methods to achieve high rankings: search engine optimisation (SEO) and pay-per-click (PPC) systems. Both require a financial investment – SEO mainly at the beginning, and PPC spread over time in regular amounts. If marketing budgets are applied in the wrong area, this could lead to losses and possibly financial ruin.

Objectives: The objective of this research was to investigate, using three real-world case studies, the actual expenditure on and income from both SEO and PPC systems. These figures were then compared, and specifically, the cost per acquisition (CPA) was used to decide which system yielded the best results.

Methodology: Three diverse websites were chosen, and analytics data for all three were compared over a 3-month period. Calculations were performed to reduce the figures to single ratios, to make comparisons between them possible.

Results: Some of the resultant ratios varied widely between websites. However, the CPA was shown to be on average 52.1 times lower for SEO than for PPC systems.

Conclusion: It was concluded that SEO should be the marketing system of preference for e-commerce-based websites. However, there are cases where PPC would yield better results – when instant traffic is required, and when a large initial expenditure is not possible.