If you own or manage a small business and are in charge of creating a marketing budget, you are probably limited in how much of your annual revenue you can allocate for marketing spend. This is particularly true for young businesses in the early stages of building a predictable revenue stream. While you may have discovered the critical value of spending a portion of your marketing dollar on digital marketing, you are still left with a dilemma regarding the specifics of breaking down that spending further.
In the world of digital marketing, there are two main buckets for spend: organic marketing and paid marketing.
How much you decide to spend on each bucket will depend greatly on your business goals, your current brand presence, and more. This guide will help you understand the critical differences between organic and paid marketing and dive into what strategy is ideal for your business. The result is that you can better optimize your marketing spend, increasing your ROI.
Understanding the Difference Between Organic and Paid
Reaching your customers online can take place in a few ways. For example, a potential customer might search for your business category via Google and find your website. Or a returning customer might click on a promotion emailed to them. The number of ways a customer could potentially find you online is vast. This is becoming increasingly true as customers grow accustomed to hopping from one digital channel to another throughout their day. Targeting customers across all these channels and touchpoints requires a strategic approach to digital marketing. This is where organic and paid marketing both come into play. First, take a look at the basics of how these two styles of online marketing differ.
What is Organic Marketing?
Organic marketing is all about the natural process of a customer finding you. This process takes place without you paying to surface an ad or to target them via any type of spend. Most organic marketing is focused on increasing organic listings on search engine results pages (SERPs). The most impactful example of this is increasing your rankings via Google — the world’s largest and most widely used search engine — for critical keywords. For example, for an HVAC company, organic marketing would involve a strategy focused on increasing Google rankings for keywords such as “AC repair near me” or “HVAC company in [city name].” The goal would be to ensure that your business shows up on page one of Google’s organic SERPs. Referred to as Search Engine Optimization (SEO), most organic marketing labor revolves around optimizing content across the web to be easily found by your target audience.
Examples of organic marketing:
- Adding optimized copy to your website
- Ensuring technical data on your website is optimized for search
- Updating title tags and meta descriptions on each webpage
- Blogging focused on a list of keywords or questions
- Creating video content
- Posting to social media channels
- Newsletters and emails
Key attributes of organic marketing:
- Often referred to as inbound marketing, organic marketing is all about leads finding you on their own. It does not involve direct spend per lead.
- Organic marketing takes time. Unlike a paid ad, surfacing your company on page one of Google’s search results won’t happen overnight. Most organic marketing strategies take a long-term approach, measuring results over six months.
- Organic marketing relies heavily on optimized content creation. Whether it is answering a common question from customers via a series of blogs and video posts or creating a succinct web page that clearly outlines where you provide your services, the goal is to have the answers to your customers’ queries.
- While organic marketing does not involve direct spend, it does involve an investment. Whether you have someone in-house doing the work or you outsource your organic marketing, it will require time and money to be successful.
What is Paid Marketing?
In contrast to organic marketing, paid marketing is the exposure you receive as a direct result of money spent. Paid marketing encompasses any ads, boosted placements, or bought media. In the past, paid marketing focused a lot on direct mailers or TV commercials. Today, most paid marketing takes place in the digital sphere, particularly for small businesses. In the case of paid marketing, a customer might find you either via a search — similar to organic marketing — or based on an ad that was pushed to them. For example, an auto repair shop might pay for ad placement on top of Google’s SERP. A customer looking for an auto repair shop sees an ad for an oil change discount listed above the organic listings. They click on this ad, and the business pays for that exposure. Another example would be if the auto repair shop paid for retargeting ads. As a customer bounces from website to website, they see a recurring advertisement for 10% off at the auto repair shop and click on that link.
Examples of paid marketing:
- Pay-per-click (PPC)
- Social media post promotion
- Social media ads
- Banner ads
- Display ads
- Influencer marketing
- Video ads
Key attributes of paid marketing:
- You pay for leads. With any paid digital marketing strategy, you will need to spend an allocated amount of money to target your customer base.
- When your budget is up, your campaign is over. Unlike organic marketing, which continues to take place in perpetuity (or at least as long as you hold your rankings), a paid campaign will stop the moment you hit the end of your allotted budget.
- Results are immediate. While organic marketing takes time, paid marketing is instantaneous. Once you set up your ad campaign, you can start gaining leads.
- Paid marketing’s success relies a lot on how well you design your campaigns (e.g., tweaking your targeted keywords, your audience segments, geographical reach, bids, and more) and on the quality of your ad copy and ad design. This is where a trusted agency partner can go a long way in ensuring that you get the most out of every dollar spent.
- It is easier to attribute leads via paid marketing. While there is certainly analytics that you can set into place to help you understand how organic marketing is providing you with leads, it is much easier to attribute a paid lead to a converted sale.
When You Should Use Organic Marketing Vs. When You Should Use Paid Marketing
Understanding the difference between organic and paid marketing, it is easy to see how they both have their own strengths and weaknesses. Ultimately, most businesses will benefit from investing in a blend of both marketing strategies. However, the percentage of your total marketing budget that you should spend on each category will depend a lot on your goals and where your business currently stands today. For example, if you are a new business and need to gain immediate traction around brand awareness, you’ll want to invest in paid marketing immediately. Paying for ads is an excellent way to reach customers quickly and effectively.
Remember, avoid the common mistakes that many businesses make and ensure that before you run a single ad, you have a clear understanding of how to set up the right budget, design eye-catching ads with engaging calls to action, and that you have an optimized landing page where you will send these leads. Otherwise, you can wind up wasting a large amount of money. On the flip side, almost any business, whether new or well-established, should be allocating at least a portion of its marketing budget to organic strategy. Organic marketing is one of the best ways to ensure long-term growth. While it requires a lot of hard work upfront and investment in technical assistance to ensure your digital presence is optimized for search, the long-term gains are incredible. Rather than paying for every lead that lands on your website, organic marketing allows you to slowly build up your online presence until you reach a point where you are easily found via search without spending a dime on ads.
Check out a few of the common scenarios and whether organic or paid is the best match:
- Running a seasonal promotion: Paid marketing is a great option for short-term promotions. This allows you to target a specific customer segment and gain traction during peak seasons.
- Building trust with customers: Organic marketing is one of the best ways to create a loyal customer base. By publishing helpful content, such as videos or blogs that answer common questions, you can begin to establish your business as a trusted partner with customers.
- Reaching customers who are searching for your business type: A blend of both organic and paid marketing is ideal for this scenario. While you are still working on increasing your organic rankings for important keywords, you can use paid ads to boost your brand’s visibility. This is particularly important when dealing with highly competitive keywords that might be difficult to rank right out of the gate.
Strike a Balance with J&L Marketing
Organic and paid marketing are both critical to your overall digital marketing strategy. Both marketing categories can help drive more leads your way, and both marketing styles have a time and a place for small businesses. At J&L Marketing, our goal is to help ensure that you get the most bang for your buck when you invest money into organic and paid marketing. Too often, businesses spend all of their marketing on campaigns that provide little to no return. Or, worse yet, they are ill-equipped to measure whether or not they are earning leads from their marketing investments.
If you are looking to invest your marketing dollar wisely, reach out to our team at J&L Marketing for a consultation. Our team will work with you to analyze your existing strategy and create a plan around both organic and paid spending. We look forward to helping you strike the perfect balance as you increase your digital reach.