Last updated: February 2, 2024
Marketers often ask whether SEO or SEM is a better channel to invest in. This question suggests a binary either/or decision, but the truth is that SEO and SEM should play very different roles in a complete digital customer acquisition strategy:
- SEO produces significantly higher ROI than SEM after the first 6 to 12 months of a campaign; a platform for ongoing, organic lead-generation; and a trove of content that can be reused on email and social channels to nurture leads
- SEM provides companies with immediate, short-term lead generation and the ability to test products in new markets without needing to make a substantive investment, as you would with SEO, video marketing, or other organic campaigns
The table below breaks down the most important differences between SEO and SEM and provides benchmarks for the metrics used to measure them.
SEO vs SEM: Overall Comparison
| SEO | SEM | |
| Marketing Type | Organic | Paid |
| Marketing Role | High-value primary lead gen channel with excellent long-term ROI, but takes a high level of skill and 4-12 months to build. | Short-term lead generation channel for keyword testing and targeting new markets; also a good complement to SEO. |
| Skill Required | High | Low |
| Cost | Moderate initially, Low long-term |
Low initially, High long term |
| Average 3-Year ROI | 748% | 36% |
| Average CAC | $485 | $802 |
| Average CTR for #1 Position | 39.8% | 2.1% |
| Average CTR for all Page 1 Positions | 5.1% | 1.5% |
| Average Conversion Rate | 2.4% | 1.3% |
SEO: Advantages and Disadvantages
| Advantages | Disadvantages |
|
|
Because SEO uses high-quality content to rank for organic positions instead of paying for ad space, it demands a much more detailed scope of work than SEM. SEO requires that marketers:
- Create detailed audience personas based on your most valuable customers
- Identify which high-traffic keywords your audience uses, and organize into a Hub & Spoke strategy
- Analyze the search intent of each keyword to prioritize them by value and assign appropriate page types
- Produce content that addresses the implicit query of each search, and publish at least twice weekly
- Track KPIs and compare against industry benchmarks to evaluate performance and adjust accordingly
This is a difficult process that requires a skilled team to manage but despite this challenge, well-executed SEO provides long-term ROI by building a high level of trust with the reader. The content that is naturally produced over the course of an SEO campaign can also be repurposed in other channels such as email drip campaigns or social media, thereby increasing the overall efficiency of your marketing spend. As a result, SEO is best suited for companies who:
- Value long-term ROI and are able to commit to longer-term marketing strategies
- Can afford to invest in multiple channels simultaneously should they need short-term lead generation
- Invest in multiple marketing channels and can take advantage of the high quality content an SEO campaign generates
SEM: Advantages and Disadvantages
| Advantages | Disadvantages |
|
|
SEM is much simpler than SEO, consisting of only two steps:
- Identify commercially valuable keywords that your potential customers search
- Pay Google for an ad position on those keywords
Compared to SEO, companies can appear at the top of searches near instantly for high-traffic keywords, if their budget allows it. While SEO campaigns take time and effort to grow, SEM provides rapid results but quickly becomes expensive when not managed properly.
While the associated expenses of SEM limit its use-cases compared to SEO, it serves an essential purpose in developing a marketing campaign. SEM works best for companies that:
- Are trying to determine their most valuable search audience, or testing new markets
- Need a highly-targeted marketing campaign of limited scope in order to support the launch of a new product
- Need immediate lead generation and can’t wait for long-term ROI
SEO vs SEM Costs
Our agency tracked spending data across 100+ clients. The costs of SEO and SEM are shown below, broken down by Startup Cost, Monthly Maintenance Cost, and # of Employees Needed.
SEO vs SEM: Cost Comparison
| SEO | SEM | ||||||
| Low Budget | Medium Budget | High Budget | Low Budget | Medium Budget | High Budget | ||
| Startup Cost | $5k | $15k | $25k | $2k | $5k | $10k | |
| Monthly Maintenance Cost | $6k | $10k | $30k | $5k–15k | $15k–25k | $25k–100k | |
| Employees Needed | 2 | 4 | 5+ | 1 | 1 | 2 | |
Executing a Marketing Strategy with SEO and SEM
SEO and SEM work best in complementary roles. SEO is the long-term powerhouse, SEM the short term testing ground and impression magnifier. Executing on both, and utilizing the data from each campaign to help the other, is one of the most beneficial strategies in all of digital marketing.
Even for experienced marketers, managing such a campaign is challenging. Because of the complexity involved, many companies choose to work with an experienced agency to handle SEO, SEM, or both, allowing their team to focus on other marketing efforts.
If you’re interested in learning more about how our SEO agency can manage your SEO & SEM strategy and execution, contact us here.
