You will also want to run the same analysis on your pay-per-click (PPC) campaign otherwise you cannot have a meaningful, like for like comparison between the two. Provided you are ready to pull money from PPC and focus it on SEO what should you expect?
While every site is unique and every site’s profile on the net is unique we shall assume for the purposes of this exercise that your site is superbly search engine optimized and that you have decent search engine marketing in place which has began to provide you with results in terms of traffic. So the question is what should the SEO vs PPC picture be like?

Experience with sites we have worked with shows that on average you should expect the organic search engine traffic to outweigh your PPC traffic by at least twenty to one. Which means you should be getting twenty organic search provided visitors for every one your pay-per-click campaign gives you.

So far this is ok and it shows the value of having a highly search engine optimized and search engine marketed website. The next question, however, which deals with conversion rates on your online visitors is much harder to answer and the reason is because it depends on the focus of your PPC and the focus of your SEO.

If, for instance, your PPC campaign is really tightly focused in terms of the keywords you have chosen then the return you will have from that will be far better than anything your organic campaign is giving you. Similarly if your SEO is really tightly focused with keywords which are very relevant to your content and the nature of your online business then the conversion ratio of your SEO will be higher than average.

If, for argument's sake, we assume that your website is optimized for the usual 200 - 250 keywords most websites are optimized for these days, which means you spread the organic campaign to bring in as much traffic as possible, then the conversion ration of your PPC will be much higher.
The exception to this rule are sites which have a sufficiently broad appeal to work well from a large natural SEO catchment and these are, traditionally, online advertising sites, artists-studios, online real estate sites and community sites.

Finally you will want to look at the quality and value of each online customer you convert. This is a very important consideration because it gives you a true picture of what you spend in order to gain one customer and what you obtain in return.

Traditionally sites which have a higher organic ranking find that the customer lifetime value is higher for organic SEO than it is for PPC. This, depends, very much, upon the nature of the customers. In the web savvy age, customers respect a high organic ranking much more than they respect a PPC campaign which can be launched by practically anyone and this is reflected in their willingness to do business with the website they have found this way.

While both PPC and SEO need to be highly targeted results from many established websites suggest that the cost required to target PPC precisely does not allow for a broad enough campaign and though very tight targeting in terms of keywords leads to a good conversion ratio it does not lead to a healthy enough volume of traffic, whereas natural SEO does.

Broadening a PPC campaign to achieve the same effect you could do with natural SEO is about the most wasteful thing you can do with your money. SEO delivers traffic which does not convert immediately. Because the site ranks high it allows visitors to check and come back and the conversion ratio, overall, is far more cost-effective. If you are paying for each word (as in a broad band of keywords in a PPC campaign) you may well end up with the same traffic figures but as each customer has cost you more to get the increase in conversion ratio is negligible while the increase in PPC costs is, usually, significant.

David Amerland is the author of the Search Engine Optimization book: SEO Help: 20 steps to get your website to Google's #1 page published by New Line Publishing and available to buy from Amazon.com and any quality bookshop. The ebook version of the book is available for Amazon Kindle as well as  Mobipocket, smartphone and Sony eBook Reader formats and available to purchase from any quality ebook retailer. You can also purchase it directly from this website. He masterminds winning SEO strategies for complex online business and helps the average webmaster get their site to the position it deserves. David has been instrumental in taking websites to the top of Google's first page in a way that has kept them there year after year. If you would like David to work on one of your SEO projects drop us a line with your request.