SEO or AdWords? What is more profitable for a b2b company in 2017
The task is as follows: there is a website layout company. The budget is about $ 25,000. The business owner is interested in returning investment in SEO and AdWords.
At first glance, comparing these channels to attract customers is difficult. For example, the results of SEO promotion come in weeks and months, but contextual advertising can be analyzed and optimized almost immediately. Nevertheless, there are measurable indicators: the amount of investment, the number of unique visitors, conversion, the number of transactions with customers, profit from such transactions.
First, let's see the overall picture of attendance over the past 3 months.
SEO is the largest channel for attracting visitors. A high bounce rate is immediately apparent. Moreover, it is high for visitors from social networks, and for those who come through referral links. Based on this indicator, the conclusion suggests itself that on average 8 out of 10 visitors find the content of the main page not relevant to their interests. For a company that has been operating in the market for more than 4 years, this looks strange.
The reason is that the company focuses on orders from medium and large customers, and does not work with entrepreneurs and small businesses. Those. the main target audience is corporate customers or medium / large business, regularly ordering layout and project updates. One-time site layout orders are not interesting for the business owner.
Accordingly, the working conditions and pricing policy are focused on medium and large companies. This explains the fact that 86% of visitors do not find the site useful. Average time spent by a visitor coming from a search engine naturally 1 minute. Those. the visitor visited the site, within a minute got acquainted with the conditions, the price, considered them unsuitable and left. This is because 8 out of 10 visitors interested in layout sites are customers who are not the target audience. This is the specificity of the company’s business.
What can be done in such a situation? Nothing. This is the effectiveness of the customer acquisition channel. It remains to take as an axiom the fact that most of the traffic on the topic of site layout is generated by entrepreneurs and representatives of small businesses, and most of the visitors, by definition, will be useless. Both in SEO and in contextual advertising, social networks, etc. This means that conversion and profit from orders will be calculated with greatly underestimated ratios.
In our case, the task of SEO is not generating mass traffic or reaching a wide audience. SEO is used to attract and establish contact with corporate customers. And the main role in this is played by articles on thematic blogs and specialized resources. Those. The criterion for the effectiveness of SEO is the readability of articles and guest posts on third-party resources by representatives of medium and large businesses, the number of clicks from third-party resources, conversion, the number of orders.
The next question is in choosing a reference point. On the attendance graph on the Organic Search channel, it can be seen that a noticeable increase in attendance begins in mid-July 2017. Accordingly, we are interested in July-November 2017.
Also, we will refer to the SEO transitions to our site from third-party resources. On the Referals channel traffic graph, traffic growth occurs at the beginning of July 2017.
If we overlay 2 charts on each other, we will see that within 14 days from the start of posting articles and guest posts, the natural traffic to the site begins to grow. The beginning of the increase in natural attendance was due to the indexation of the second article posted on a third-party resource.
In total, we attribute the costs of SEO promotion:
- payment for writing articles and guest posts
- payment for posting publications and guest posts on third-party resources
We’ll take the traffic from the AdWords paid advertising channel for the same time period July 1 - November 20.
The bounce rate is here below. The average number of page views is higher. Nevertheless, an average of 6 out of 10 visitors are not the target audience.
Based on the data in the table, it is not difficult to calculate the average cost of attracting a visitor to the landing page, the cost of receiving 1 order and other parameters. In the previous analytical review, we already made such calculations, if you are interested, you can read here .
In this case, it makes no sense to consider such parameters. In conditions when the majority of visitors, by definition, cannot be customers of the company, these numbers will indicate that the choice of channel for attracting customers is not optimal. Instead, we immediately analyze CRM and see the number of real orders with site visitors, their profitability.
Here another question arises - how to distinguish the target visitor from the non-target? If the visitor went to the page for filling out the order form, we will assume that this was done by a representative of medium or large business. Otherwise, the visitor will leave the site immediately and will not go to other pages.
For SEO, we summarize the goals for the Ogranic + Referals channels. The goal is to go to the page for filling out the order form, call or email. To track calls and email in CRM installed special plugins.
According to the table, SEO results: Of the 332 visitors who came to the order page, 171 visitors filled out the order form. 19 visitors made a call. 27 sent emails. The conversion is 65%.
AdWords results: Of the 163 visitors to the order page, 119 completed the order form, 6 visitors made a call and 11 sent emails. The conversion is 83%.
For clarity, we visualize this data.
It turns out to use SEO to collect orders 3 times cheaper than in AdWords.
In addition, we check whether there are visitors who came to the site for search results and paid advertising. To do this, we look at the behavior of users on the path to conversion (conversion paths).
If the user navigated to the site on each of the channels, we count the last channel which led to the conversion. Accordingly, the last interaction attribution model is used.
To analyze transactions, we use export sales statistics from CRM to datawrapper.
Visitors via the SEO channel sent 198 applications for the layout. In 56% of cases, orders were damaged. Total profit from orders received amounted to $ 308.246. In 44% of cases, applications were not paid for various reasons. Unconfirmed orders could bring the company $ 242,194.
AdWords paid advertising channel: 127 requests for layout. 71% of confirmed orders. Total profit of $ 281.871. 29% of outstanding applications in the amount of $ 115.131.
Next, we calculate the potential for earning and profit, taking into account advertising costs for each of the channels for attracting customers.
Conclusion: in terms of minimum cost-maximum profit, using SEO is 4 times more profitable than contextual advertising AdWords. Or rather, not all search engine optimization, but a specific direction - the publication of articles and guest posts on thematic blogs.
* - refers to profit excluding costs (office rental, employee salaries, equipment, etc.)
In our case, both SEO and AdWords are payback and profitable channels for attracting customers. In terms of the cost of attracting a targeted visitor, SEO is several times more profitable than AdWords. In terms of return on investment, using SEO is 4 times more profitable. However, such a promotion takes time. You need to write or order an article, agree on a placement, wait for indexing, etc. All this takes time and in practice articles are published about 2 times a month.
Nevertheless, if you look at the situation globally, both SEO and AdWords are not the most effective channels for attracting visitors if the company seeks to work with representatives of large and medium-sized businesses. Given that in the SEO channel about 14% of the target audience, and in the AdWords channel about 40%, most of the advertising budget goes to increase website traffic for non-targeted visitors.
For example, at a thematic conference of 100 people, 70-80 can be representatives of large or medium-sized businesses. In such a channel for attracting customers, 70-80% of the target audience is already.
At first glance, comparing these channels to attract customers is difficult. For example, the results of SEO promotion come in weeks and months, but contextual advertising can be analyzed and optimized almost immediately. Nevertheless, there are measurable indicators: the amount of investment, the number of unique visitors, conversion, the number of transactions with customers, profit from such transactions.
Part 1. Website traffic analysis
First, let's see the overall picture of attendance over the past 3 months.
SEO is the largest channel for attracting visitors. A high bounce rate is immediately apparent. Moreover, it is high for visitors from social networks, and for those who come through referral links. Based on this indicator, the conclusion suggests itself that on average 8 out of 10 visitors find the content of the main page not relevant to their interests. For a company that has been operating in the market for more than 4 years, this looks strange.
The reason is that the company focuses on orders from medium and large customers, and does not work with entrepreneurs and small businesses. Those. the main target audience is corporate customers or medium / large business, regularly ordering layout and project updates. One-time site layout orders are not interesting for the business owner.
Accordingly, the working conditions and pricing policy are focused on medium and large companies. This explains the fact that 86% of visitors do not find the site useful. Average time spent by a visitor coming from a search engine naturally 1 minute. Those. the visitor visited the site, within a minute got acquainted with the conditions, the price, considered them unsuitable and left. This is because 8 out of 10 visitors interested in layout sites are customers who are not the target audience. This is the specificity of the company’s business.
What can be done in such a situation? Nothing. This is the effectiveness of the customer acquisition channel. It remains to take as an axiom the fact that most of the traffic on the topic of site layout is generated by entrepreneurs and representatives of small businesses, and most of the visitors, by definition, will be useless. Both in SEO and in contextual advertising, social networks, etc. This means that conversion and profit from orders will be calculated with greatly underestimated ratios.
In our case, the task of SEO is not generating mass traffic or reaching a wide audience. SEO is used to attract and establish contact with corporate customers. And the main role in this is played by articles on thematic blogs and specialized resources. Those. The criterion for the effectiveness of SEO is the readability of articles and guest posts on third-party resources by representatives of medium and large businesses, the number of clicks from third-party resources, conversion, the number of orders.
The next question is in choosing a reference point. On the attendance graph on the Organic Search channel, it can be seen that a noticeable increase in attendance begins in mid-July 2017. Accordingly, we are interested in July-November 2017.
Also, we will refer to the SEO transitions to our site from third-party resources. On the Referals channel traffic graph, traffic growth occurs at the beginning of July 2017.
If we overlay 2 charts on each other, we will see that within 14 days from the start of posting articles and guest posts, the natural traffic to the site begins to grow. The beginning of the increase in natural attendance was due to the indexation of the second article posted on a third-party resource.
In total, we attribute the costs of SEO promotion:
- payment for writing articles and guest posts
- payment for posting publications and guest posts on third-party resources
Part 2. Analyzing AdWords
We’ll take the traffic from the AdWords paid advertising channel for the same time period July 1 - November 20.
The bounce rate is here below. The average number of page views is higher. Nevertheless, an average of 6 out of 10 visitors are not the target audience.
Based on the data in the table, it is not difficult to calculate the average cost of attracting a visitor to the landing page, the cost of receiving 1 order and other parameters. In the previous analytical review, we already made such calculations, if you are interested, you can read here .
In this case, it makes no sense to consider such parameters. In conditions when the majority of visitors, by definition, cannot be customers of the company, these numbers will indicate that the choice of channel for attracting customers is not optimal. Instead, we immediately analyze CRM and see the number of real orders with site visitors, their profitability.
Here another question arises - how to distinguish the target visitor from the non-target? If the visitor went to the page for filling out the order form, we will assume that this was done by a representative of medium or large business. Otherwise, the visitor will leave the site immediately and will not go to other pages.
For SEO, we summarize the goals for the Ogranic + Referals channels. The goal is to go to the page for filling out the order form, call or email. To track calls and email in CRM installed special plugins.
According to the table, SEO results: Of the 332 visitors who came to the order page, 171 visitors filled out the order form. 19 visitors made a call. 27 sent emails. The conversion is 65%.
AdWords results: Of the 163 visitors to the order page, 119 completed the order form, 6 visitors made a call and 11 sent emails. The conversion is 83%.
For clarity, we visualize this data.
It turns out to use SEO to collect orders 3 times cheaper than in AdWords.
In addition, we check whether there are visitors who came to the site for search results and paid advertising. To do this, we look at the behavior of users on the path to conversion (conversion paths).
If the user navigated to the site on each of the channels, we count the last channel which led to the conversion. Accordingly, the last interaction attribution model is used.
Part 3. Analyzing CRM
To analyze transactions, we use export sales statistics from CRM to datawrapper.
Visitors via the SEO channel sent 198 applications for the layout. In 56% of cases, orders were damaged. Total profit from orders received amounted to $ 308.246. In 44% of cases, applications were not paid for various reasons. Unconfirmed orders could bring the company $ 242,194.
AdWords paid advertising channel: 127 requests for layout. 71% of confirmed orders. Total profit of $ 281.871. 29% of outstanding applications in the amount of $ 115.131.
Next, we calculate the potential for earning and profit, taking into account advertising costs for each of the channels for attracting customers.
Conclusion: in terms of minimum cost-maximum profit, using SEO is 4 times more profitable than contextual advertising AdWords. Or rather, not all search engine optimization, but a specific direction - the publication of articles and guest posts on thematic blogs.
* - refers to profit excluding costs (office rental, employee salaries, equipment, etc.)
Part 4. Conclusions
In our case, both SEO and AdWords are payback and profitable channels for attracting customers. In terms of the cost of attracting a targeted visitor, SEO is several times more profitable than AdWords. In terms of return on investment, using SEO is 4 times more profitable. However, such a promotion takes time. You need to write or order an article, agree on a placement, wait for indexing, etc. All this takes time and in practice articles are published about 2 times a month.
Nevertheless, if you look at the situation globally, both SEO and AdWords are not the most effective channels for attracting visitors if the company seeks to work with representatives of large and medium-sized businesses. Given that in the SEO channel about 14% of the target audience, and in the AdWords channel about 40%, most of the advertising budget goes to increase website traffic for non-targeted visitors.
For example, at a thematic conference of 100 people, 70-80 can be representatives of large or medium-sized businesses. In such a channel for attracting customers, 70-80% of the target audience is already.