Like any other marketing channel, investing in SEO has advantages and disadvantages.
In this article, I am not going to reach any conclusion regarding whether or not you should invest in SEO.
This is because the investment decision can depend upon several factors like your current organic search traffic, your marketing budget, your team size, your business goals, and your targets.
However, my hope is to equip you with enough information so that you can make an informed decision on your own. Let’s start with the advantages of investing in SEO.
You get almost free traffic to your website 24 hours a day, 7 days a week and 365 days a year.
SEO is great for reducing CPA over time.
SEO can act as a powerful moat for your business.
#1 You get almost free traffic to your website 24 hours a day, 7 days a week and 365 days a year.
While the traffic that you generate through SEO is not exactly free (you still need to pay for content development, link building and on-page optimization), it does become almost free over time.
Once your articles started generating free organic search traffic they can continue to do so for months and years even when you are no longer actively working on these articles.
You can send millions of visitors a month to your website via SEO for a dirt-cheap price. The price is dirt cheap in comparison to buying the same volume of traffic each month via Google or Facebook ads.
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Scaling paid advertising is not really difficult. Just increase your ad spend, target bigger and broader markets and keep selling. But what is not easy at all is to keep your cost per acquisition (CPA) under control.
As you scale your advertising, you have to target a bigger and broader audience and this starts increasing your CPA. At some point, your CPA could become so high that you are no longer profitable and are forced to scale down.
To keep your advertising profitable, you can’t just rely on paid traffic indefinitely. You would also need tons of free organic search traffic.
The customers acquired through organic search traffic would be far cheaper for you than the same customers acquired through paid traffic.
Also when you retarget this organic search traffic via paid ads, your CPA is going to be much lower than your competitors. What that means is you can continue to profitably scale your paid ads.
In other words, SEO can make your paid advertising even more profitable over time.
#3 SEO can act as a powerful moat for your business
It takes years to generate a considerable amount of traffic via SEO. But once you have done that, you ended up building a powerful SEO moat for your business.
Organic search traffic is not something that your competitor can just buy from a shop. They would actually need to sit down and grind for months and years to compete with your organic search traffic. Not many are willing to do that.
Disadvantages of SEO in 2024
SEO is not really meant for startups
SEO mistakes could easily kill your startup
With SEO there are no guarantees of almost anything
SEO takes a very long time to show results and positive ROI
The negative ROI from SEO can easily cripple your business.
Many companies strongly favour investing significantly more in paid ads than in SEO.
Contrary to popular belief, SEO is not really meant for startups.
SEO works well for the business which can afford to invest significant amount of capital upfront without expecting any returns for months.
The biggest mistake I made as a startup founder is that I started building website traffic through organic methods like content development and SEO.
What I should have done instead, is start with paid advertising and then later move to organic search.
When you are a start-up then maintaining monthly positive cash flow is more important than waiting to benefit from the long term gains that you get through organic advertising methods.
Because if you run out of money long before you can see the benefits of long term gains, you are out of business. Game over. The end.
As a small business owner, your first priority is to “survive” in your trade. That means you need a stronghold on your cash flow.
You need to focus on immediate gains and aim to get an immediate return on your investment.
This is possible only when you focus on optimizing your website for conversions and keep a close eye on every dollar spent. SEO can’t do that for you.
With paid advertising, you will either win fast or fail fast. In any case, you would know how to improve your business bottom line ASAP.
If you can make money from paid advertising, you sure can make money from SEO. Consider paid traffic as a litmus test. You need to pass this test in order to be qualified for running SEO.
#2 SEO mistakes could easily kill your startup
Following are the four SEO mistakes that could kill your startup.
You targeted the wrong keywords from the very start.
You hired a bad SEO
You could not cut your losses quickly
You ran out of cash before you could benefit from the SEO efforts.
#2.1 You targeted the wrong keywords from the very start.
SEO mistakes could be so costly that it is better to make some relatively cheap PPC mistakes by testing your targeted keywords first. Here is what I meant.
The success of any SEO campaign mainly depends upon the keywords you have selected for your website. It can take several months to a year to rank for your primary keywords.
So if you ended up optimizing your website for keywords that didn’t generate the traffic and conversions as you expected then all of your hard work (along with your money) goes down the drain.
Let’s say you come up with some 100 keywords for your website after exhaustive keyword research. Now you would like to know whether these keywords are really worth ranking for.
By running a PPC campaign for 3 to 6 weeks you can get fairly accurate estimates of a keyword’s search volume and its potential to convert for your business/product.
No keyword research tool other than PPC can tell you how a particular keyword will perform for your business or the type of product/service you sell.
If you have the actual search volume and conversion data for your targeted keywords then you can make better projections of what an increase in traffic/ranking for targeted keywords would look like in $ terms.
The kind of analytical insight you get about your targeted keywords through PPC is unparalleled.
That’s why even if you have more time than money as a startup founder, I would still suggest that you start with paid advertising.
Not all SEOs are able to deliver promised results. In fact, many fail to produce results.
The bad SEOs have tarnished the reputation of the whole SEO industry to the point that many SEO professionals don’t like to call themselves SEO anymore.
Finding a really good SEO is like finding a needle in a hack stack and most of the good ones are not cheap.
Since SEO takes a long time to show results, the majority of SEOs ask for a minimum 3 to 6 months commitment. And SEO professionals are not cheap to hire.
So a bad hire can significantly damage the financial health of your startup.
#2.3 You could not cut your losses quickly
Since SEO takes months to see considerable results, you can not find another SEO guy just after a month or two of poor performance. So you have to put up with him for at least 3 to 6 months and continue to lose money.
Whenever you complain about lack of progress or poor performance they have the perfect excuse ‘SEO takes time to see results’.
This is not the case with Paid Ads professionals because they can not make any such excuse. Your paid Ads will report ROI pretty quickly.
So if your Facebook guy is not producing the desired ROI, you can let him go after a month or two. What that means, you as a business are risking losing less money on hiring a paid Ads professional.
Cutting your losses with Paid ads is far easier and you can also start small. So for example, you can start with a $20 daily ad spend. If that doesn’t work out well. Stop the campaign. Easy peasy.
In contrast, start with $5k monthly ad spend on SEO and if that doesn’t work out, well then tough luck.
The majority of SEOs ask for a minimum 3 to 6 months commitment and they do charge a lot more than paid ad Ads professionals from the very start.
You are paying all this huge amount of money upfront month after month and there is no guarantee of results. This is what makes the SEO investment so risky for any business esp for startups.
#2.4 You ran out of cash before you could benefit from the SEO efforts.
Remember the cash flow problem I mentioned earlier?
As a small business owner, your first priority is to ‘survive’ in your trade. What that means is you need a stronghold on your cash flow.
You need to focus on immediate gains and aim to get an immediate ROI. SEO can’t do that for you.
So if you run out of cash before you could benefit from the SEO efforts, game over. The end.
#3 With SEO there are no guarantees of almost anything
SEO comes with almost no guarantee of anything. Keep in mind that:
There is no guarantee of no.1 ranking or consistent top 10 rankings for any keyword phrase as SEO has no control over search engine ranking algorithms and ongoing SEO efforts by competitors. Any SEO who make such promises is misleading you.
Search engines like Google may hinder the rankings of new websites until they have proved their ability to exist for more than ‘x’ amount of time or have enough backlink strength.
A new website may get a temporary boost in ranking for some targeted keywords for a few days but then it settles down to its real place.
Search engines can drop rankings of your website for no clear or predictable reason.
A website search engine ranking can fluctuate/change any day, any time because of the ongoing changes in the ranking algorithm, SEO efforts made by your competitors, or both.
There is no guarantee that you will see +ve ROI even after 6 months or a year of waiting.
There is no guarantee that your website traffic would not be worse off after SEO. One of our clients ended up getting Google Penalty and lost more traffic and sales as a result of hiring an SEO agency. Ever since they lost all faith in SEO.
#4 SEO takes a very long time to show results and positive ROI
SEO is not like paid ads which you can launch today and by the end of tomorrow, you started generating sales and +ve ROI.
With SEO, it can take months and years to see results and +ROI. And time is money.
While you are waiting to rank for your target keywords, you are losing all the potential sales to your competitors.
While you are waiting to rank for your target keywords, your competitors are capitalizing on current market trends and opportunities by reaching out to your customers faster via paid ads.
Your competitors are getting richer by the day through paid ads while you are getting poorer by the day as you are spending tons of money upfront on SEO with no immediate ROI and no guarantee of returns.
#5 The negative ROI from SEO can easily cripple your business
What is the worst that could happen if your paid campaign failed? You lost all the money you spent on the campaign. But you still do not lose existing website traffic and sales.
Now, what is the worst that could happen if your SEO failed? Not only do you lose all the money you spent on SEO but you could also end up losing existing website traffic and sales if your website is hit by a Google Penalty.
Most people do not realise this but SEO is in fact one of the riskiest forms of online marketing as it comes with almost no guarantee of anything. You as a business are just blindly relying on your SEO guy and hoping for the best.
If your ad account (Google Ads, Facebook ads etc) get banned for whatever reason, you can start all over again relatively quickly. It’s not the end of the world.
But it is pretty much the end of your world once your organic traffic tanked and this traffic is the major source of traffic and sales for your business.
It takes months and years to earn organic search traffic and recovery can take an equally long time.
#6 Many companies strongly favour investing significantly more in paid ads than in SEO.
SEO doesn’t get the marketing budget it deserves. It’s a ‘big’ monetary risk for any company to invest in SEO because of the following reasons:
#6.1 Companies spend money where their is less risk and where they can see clear ROI.
Unfortunately, SEO is not able to do that. There is no straightforward and easy way to calculate and demonstrate SEO ROI. It is very hard to justify more budget if you can’t demonstrate ROI in monetary terms.
With paid advertisement calculating the ROI is as easy as keeping an eye on dollars in and dollars out.
#6.2 Many businesses want immediate ROI in order to meet and maintain monthly +ve cash flow.
#6.3 Marketing managers are expected to report quarterly performance
In many companies, the performance of marketing managers is assessed on a quarterly basis.
So they are required to demonstrate +ve ROI within a couple of months. SEO is not able to do that for them. Consequently, they prefer to invest in paid ads.
#6.4 A bad SEO hire can turn out to be much more costly for a business than hiring an incompetent paid Ads professional.
Since SEO takes a long time to show results, you would need to keep your SEO for at least 3 to 6 months before you are in a position to assess his performance.
Whereas in the case of paid ads, you can fire the paid ads professional relatively fast if he doesn’t show +ve ROI as paid ads reports ROI pretty quick.
#6.5 Paid advertising provides precise targeting options and is specially created for generating conversions.
#6.6 There is no guarantee that your website traffic would not be worse off after SEO.
This makes investing in SEO riskier than investing in paid ads.
#6.7 SEO requires significant input from the business that hired the SEO.
It’s not like once you hired the SEO, you don’t need to do any more SEO work.
Periodically, your SEO would send your recommendations for on-site optimization and you or your developer are required to implement those recommendations in a timely manner. What that means is that SEO is a ‘done with you’ type of service.
Whereas paid ads are a ‘done for you’ type of service. That makes investing in paid ads much more appealing for many businesses that lack resources.
#6.8 SEO’s work is often not transparent.
You don’t really know what your SEO is doing to improve your website traffic. Where they are getting the links from. Are they buying links or breaking some other Google’s guidelines?
Whereas in the case of paid ads, you can log in to your ad account, check the dashboard and see what is going on at any time of the day.
I think companies would be better off using an in-house SEO. At least then they have more control over day to day SEO work.
#6.9 With SEO, your business is at the mercy of Google Algo updates
When you use SEO to generate website traffic, you have very little control over that traffic. If tomorrow Google stops sending the traffic to your website for whatever reason (maybe you got a penalty for buying links), you are toast.
Contrary to popular belief, the majority of your website traffic coming from paid ads is actually a sign of a healthy business. Because then your business is not at the mercy of Google algo updates.
#6.10 Negative SEO from competitors can destroy your SEO efforts
Negative SEO is carried out with the aim to de-rank the website of your competitors. So that they lose organic search traffic and sales.
Negative SEO is more likely to hurt a brand new website than a well-established one. But it is still another risk for you when you are relying on SEO.
#6.11 You can not scale your business fast with SEO
This is one of the biggest disadvantages of SEO.
Over the years I have worked with countless businesses both big and small. The businesses which are making boatloads of money are those that do paid advertising. Spending thousands or tens of thousands of dollars a day on ads.
And because of that, they become million dollars or multi-million dollar businesses within a few years. And some within a few months even with a team smaller than 5 people.
And then I see businesses that rely purely on inbound marketing and SEO and how they continue to struggle year after year and grow at an incredibly slow pace.
And that happens because they don’t know what works or doesn’t work in their marketing.
You can scale a process/funnel/system only if you are confident that it works 9 out of 10 times. When you lack such confidence you either don’t do paid advertising or you don’t spend enough on paid advertising.
In fact, now we don’t work with any business that doesn’t do paid advertising.
Because that just means, you do not have solid ‘proof of concept’, battle-tested funnel, and/or a great understanding of your target audience.
That’s why you are struggling with paid advertising and stuck with SEO and inbound marketing (which are great for reducing CPA over time but not something that should be your primary weapon).
So do not be alarmed if a company choose to spend 10X more on paid ads. Companies spend money where there is less risk and where they can see clear ROI.
I often hear the argument that SEO deserves more budget because it generates more traffic and sales than all other channels combined. Here is the truth…
SEO actually ends up claiming a lot of traffic and sales from other marketing channels in the form of branded organic search traffic.
It is not just SEO but all marketing channels create a ‘demand’ for your product/brand and this demand results in return visits to your website which is often either in the form of direct traffic or branded organic search traffic.
That’s why most of the traffic and sales in analytics reports are “almost always” attributed to either direct traffic or organic search traffic.
But that doesn’t mean that it is always the SEO that is doing all the heavy lifting and therefore deserves more conversion credit than all other channels combined.
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About the Author
Himanshu Sharma
Founder, OptimizeSmart.com
Over 15 years of experience in digital analytics and marketing
Author of four best-selling books on digital analytics and conversion optimization
Nominated for Digital Analytics Association Awards for Excellence
Runs one of the most popular blogs in the world on digital analytics
Consultant to countless small and big businesses over the decade
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