SEO vs. PPC

Search Engine Optimization (SEO) and Pay Per Click (PPC) are the two leading techniques in the Search Engine Marketing (SEM) toolkit. While both are powerful strategies, most SEM professionals who offer the two services agree that SEO earns substantially better ROI than PPC does. Numerous reliable studies demonstrate this as well. But that does not mean PPC is not highly useful, or even preferable for some sites and companies.

Most search engine positions are NOT for sale. About 60% of the top search engines' screen real estate is devoted to non-paid, "organic" listings - which means 60% of your search engine visibility depends on SEO, not PPC or other paid placement. On average, about 70% of clicks from search engines come from SEO. PPC campaigns usually require nearly as much labor to set up as SEO requires, in addition to the click charges you pay after set up is complete. PPC requires ongoing management, whereas SEO, when done right, is done once and performs superbly in perpetuity. PPC prices are constantly increasing, often beyond positive ROI for your most important phrases, while SEO listings are free. Finally, PPC is increasingly beset by varieties of "click fraud."

PPC is the second most cost-effective form of web marketing, after SEO. Therefore, your first priority is to ensure that your site has optimum inclusion and rank within the non-paid, "organic" or "editorial" parts of Google, Yahoo, MSN, AOLsearch, and the other top search engines. Your second priority is to establish a winning PPC campaign that does not cannibalize your SEO.

Source: http://www.2disc.com/seo_vs_ppc.html