Traffic is the lifeblood of an Internet business, and the two biggest sources are Search Engine Optimization and pay per click advertising. But if your budget and time are limited, the question is which one would be better for your business?

Which customer is more likely to buy – the one who comes from organic search or the one directed from a pay per click ad? The issue has been debated for quite a while. Usually proponents have a bias depending on whether they are selling seo or ppc services.

Now finally there is hard, substantial data, and the difference is significant.

Engine Ready, an Internet market company, recently analyzed 18.7 million visits over 2 years to websites run by 27 of the company’s clients.

Visitors who clicked on paid links were 17% more likely to buy something, and spend about 18% more on each order.

Not only are the results significant, but when you take into consideration the time it takes for seo to work, and all the work that goes into search optimization, especially for popular terms, the case for pay per click is even more impressive.

But there is an even more valuable customer according to the study.

People who come to a site by directly typing in a web address directly into a browser or clicking a bookmark are the best customers of all. They tend to be repeat customers, stay the longest and spend the most money and are most likely to convert to buyers.

How to you get these customers?
By building a brand. When your site becomes a brand within a niche, it rises above the clutter and becomes a source that customers seek.

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Google Adwords has gotten more expensive and much more complicated to deal with. Now you  have to be just as concerned with your landing page - its quality and robustness - as you do with the google ads themselves.

MSN Search and Yahoo Search are improving. While they can be cheaper than Google, they are still significantly more expensive than small search engines. A few years ago a marketing research company found that pay per click advertising using small search engines could be successful and far cheaper than using the big 3 players. It recently revisited the the whole issue of smaller search engines to see what the results would be today.

The search engines included in the tests were Enhance, Miva, Kanoodle, Mamma, GoClick, AdBrite and Ask. Here are the main results for one of the tests - for a newspaper site.

-Conversation ratio to sales for Miva were .09%, at a cost of  $66.58 per sale.
-The conversion ratio for Enhance was .04% at a cost of  $292.38 per sale.
-Conversion and sales for the other search engines were negligible.

The results are a mixed bag. The cost per sale for Miva was 43.4% lower than Google over the same period and 59.2% lower than Yahoo search. That’s good, but the volume for all the small search engines was low, and as you saw, conversion ratios were also low, so total sales were disappointing.

The upshot is you can test smaller search engines, but be careful. While your cost per sale (or action) may indeed be lower than that of the big 3, make sure that your total sales are high enough to exceed the time and cost of setting up the campaign.

Source: Marketing Experiments