PPC – Strategy Or Money Pit?

“Wide diversification is only required when investors do not understand what they are doing.” – Warren Buffett

If you look at the title of this article you may wonder what a financial quote from investor Warren Buffett has to do with Pay Per Click (PPC) advertising.

Allow me to explain. PPC advertising does provide diversification, and if you’re an online marketer you are investing time and financial resources in a tool that is designed to provide a return on your investment (ROI), but this diversification, while varied, provides only a marginal (and short term) return on investment.

The use of Search Engine Optimization (SEO) techniques are certainly less costly while providing greater long-term ROI. After all if you could avoid paying an advertising bill wouldn’t you?

“If past history was all there was to the game, the richest people would be librarians.” – Warren Buffet

Warren Buffet is one of the richest men in the world, perhaps that’s why he understands that past performance or even past knowledge doesn’t always help you manage future changes. If you are looking there for a reference point it is time to shift your focus.

PPC is propped up as the gold standard in online advertising. I’m certainly not saying it’s a horrid investment, but the truth is why should you pay for something you could get at no cost? SEO is a tool that may take a little while to see returns, but in the end SEO can make a greater impact than using a tool that provides only short-term hits, which go away when your advertising funds run dry.

“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” – Paul Samuelson

When you view PPC and SEO in light of the quote above you can link PPC with the $800 in Vegas and SEO with watching paint dry. It may be more exciting going to Vegas and blow some cash, however it is the slow and steady progression of paint drying that allows SEO to be noticed long after you’ve lost the airline ticket stubs from Vegas metaphorically speaking.

It is possible to come away from this article believing I have no use for PPC advertising. The truth is I actually believe moderate and strategic use of PPC can possess some short-term value, but I also think that many online businesses are taking the cue from Tom Hanks in the 1986 movie, “Money Pit”, they just keep flushing money away without ever really getting their business to the level they desire. Of course the frustration Tom Hanks experienced in that movie will also come with the territory of banking your strategy on PPC advertising alone.

Initially I think that PPC and SEO can both be used in tandem to develop a business website, but as you begin to realize SEO strategy potential, PPC advertising should be reduced and potentially eliminated from your long-term strategies depending on your overall success in SEO development.

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