Google Ads reveals the following: If Anna wanted to buy one click from users looking for “amber bracelets” online she would pay an average price of $ 0.95.
This means that buying the traffic to receive $52.50 in revenue, i.e. one hundred clicks, will cost her $95.
By that the jewelry store could not survive on PPC. Given the high prices for targeted PPC traffic, PPC requires a relatively high profit margin in order to be profitable and vice versa: a low profit margin is no problem if click prices are low.
In our case Anna would have to spend $95 to receive $52.50 in revenue. As other related search phrases show a similar PPC price buying traffic from Google would make her lose money, and not make any.
The relationship between PPC price and profit margin also is the reason why attorneys can afford to pay $20 or more per click. For an attorney whose minimum retainer fee is $5,000 and whose conversion rate is 1% spending the necessary amount to see one conversion (100 visitors for the price of $20 x 100 = $2,000) still is an excellent deal: pay $2,000 and get $5,000 in return.
SEO vs. PPC: Anna’s jewelry store would benefit more from a sustainable SEO strategy than from PPC. With a monthly SEO plan for $1,750 her organic traffic could be grown to about 3,700 visitors/month in about a five months time-frame – these are average results for an online shop.
The store would then generate $1942.50 per month in revenue from month number five onwards. Five months of SEO would come down to $8,750 in expenses. $8750 divided by $1,942.50 is a little more than four.
Conclusion: For Anna this means it would take about five months to have the SEO expenses amortized. Consequently, about five months after launching her store Anna would run a profitable business bringing in almost $2,000 per month in a self-sustainable way, without the need to buy traffic at all.
As all growth had been gained in a sustainable way which includes a strict no-spam approach, Anna is at no risk to lose rankings, and by that: revenue, due to a manual penalty or a Google algorithm change.