Small businesses come and go every day across the country. We’ve all heard the statistics: four out of five small businesses fail within the first five years, and so forth. There are lots of reasons why that happens, but one of the most significant is that it’s simply too hard for a small business to get a reputation for being special in today’s advertising environment.

People in America are exposed to somewhere upwards of four thousand advertising messages every day. We’re blind to them. So how is a small business supposed to alert people to the fact that they exist and that they have something special to offer?

Simple — at some point, people who want something and don’t know where to get it look it up — and in the Information Age, they usually look it up on Google. Enter Local internet marketing: a source of easy first page placement for a variety of locale-specific keywords, but more importantly an easy way to show up on the top of the list of “Xs in City Y”.

The Local Scene
Did you know that 50% of surfers never even look past the top item in one of those lists? That means that if you purchase a bit of local internet marketing, half of the people who search for “martial arts supplies Yelm” aren’t going to even glance at your competitors. They’ll see you, find you on the little map, and head for the door. That’s a lot of power.

Cost Efficiency
The best part about local internet marketing is that it costs pennies on the dollar to a radio advertisement on a local channel — much less a TV ad or a full-page newspaper ad for a week. It’s also a lot easier to come up with 3 short lines to say about nunchaku and shuriken than it is to come up with an entire radio spot or TV ad. You don’t have to pay a (voice) actor, either.

Local internet marketing is a crucial tool for any business savvy enough to have it’s own website — more often than you’d think, it’s the nudge over the breaking point that keeps a business in business.

No one is arguing the fact that you need traffic in order to be successful online. End of story. But where you get your traffic from; now that’s a debate that will rage for ages. Proponents of organic SEO claim that the cost per visit in the end is much less than from a more direct form of traffic purchase, primarily pay per click marketing. PPC management firms, on the other hand, claim that SEO is hampered by high entrance costs made worse by a lack of return.

The truth is, they’re both right.

Cashflow or Cash Efficiency?
The two competing economic drives for any entity — but they are particularly pressing for small businesses — are cash flow and cash efficiency. Think about it like a grocery store: you can buy a small package today for a small amount, but the cost-per-pound will be high; or you can by a big package today for a bigger amount, but the cost-per-pound is lower, so you actually save money in the long run.

In this scenario, pay-per-click advertising is like buying those small, high cost-per-pound steaks. You purchase 1.5 lbs. of meat for $4.98, and you’re happy to do it because you only have $10 in your pocket, so you can’t afford to pay less than $2.99 per pound. SEO is like buying a Family Pack — you buy 12 lbs. of meat for $15.78, and you’re happy to do it because you’re only paying $1.49 per pound.

Traffic Now or Traffic Later?
This works because, in PPC, you only pay when someone clicks through. That means, if your conversions are decent, you should make a sale for every 50 or so times you have to pay for a click — in short, you make your money as you spend it, so you have better cashflow even if your cash efficiency sucks.

With organic SEO, however, you’re essentially investing — you pay $400 this month for 3000 visitors that trickle in over the next three months. Your cost per visitor is quite low, but the cost is all up front and the income is all a long ways off. If you don’t have the financial backing to stay in business for those few months, SEO simply won’t work for you.

In short, the answer is that SEO isn’t actually better than buying traffic — not for everyone. Different business in different circumstances will find one preferably over the other, but neither is clearly superior overall.

If you’re not familiar with the concept of Bum Marketing, it works something like this: you have no website, no money, and no nothing except a computer, an Internet connection, and a basic understanding of the English language. You go out and find a product that has an affiliate program and an article directory that will allow you to post affiliate links. You write articles about the product, include your affiliate links, and post them.

At some point, someone reads your article, follows your affiliate link, and buys the product. You make money. It’s article writing and distribution at it’s most primal and unpolished.

The thing about Bum Marketing is that it actually works for some people. To figure out how this relates to SEO, we have to look at which people it works for — and more specifically what they do to make it work.

What they do is simple: they write a strong article. Then, they spin it on both the sentence and the word levels. Then they take the spun articles and they distribute them across hundreds of article directories. They link all of the spins to one ‘main’ article, and then they attach their affiliate link to the ‘main’ article.

This works, and it works well — because not only are they weaving a wide sales funnel to guide visitors down, but the linking structure makes that ‘main’ article look very nice to the search engines, so it’ll get maximum natural traffic and exposure.

We SEO nerds would do well to look at this humble, grassroots practice when we build our backlinks. If we take the time to identify the best pieces of off-page content and build link structures around them, we could end up benefiting our clients even more in the long run than if we had simply built those structures around the parent site.

It might run contrary to some people’s ideas of SEO, because those secondary links obviously don’t help the main page achieve first page placement. On the other hand, if the off-page content is good enough to drive traffic and get conversions, will the client really be that upset that there was an extra step between Google and his pocketbook?

Some of you are smirking right now, and some are wondering what happened to my spellchecker and when I could have meant to spell when I wrote ‘Stig’. All I can say is, look it up. The important thing to know is that he’s fast. So is the traffic that hits your website when you find a good PPC management firm and drop some cash on pay-per-click marketing.

There’s a lot of people disrespecting PPC right now, and the numbers appear pretty dire. Studies say that 80% of the money spent on search engine marketing is spent on PPC — the other 20% is spent on SEO. Then they tell you that 80% of search engine traffic comes from SEO — the other 20% comes from PPC. Sounds like someone’s been studying the Pareto Principle, doesn’t it?

Here’s the thing — the numbers are right, but the interpretation of the numbers is flawed. The basic assertion is that each visitor from PPC costs about four times more than each visitor from organic SEO, and that’s absolutely true. But look at the difference between the two.

When you pay for SEO, you’re paying now for visitors that won’t come for months. It’s not a purchase, it’s an investment. And yes, you’ll get a few visitors for the cost that you’ll pay for a single click of PPC. But the biggest problem that startup web businesses have isn’t cash — it’s cashflow. Your income has to be greater than your outgo on a week-to-week or month-to-month basis.

PPC doesn’t give you cashflow problems the way SEO does. SEO demands a few — or several — hundred dollars right now, and doesn’t give you a shred of payout for as much as half a year. In fact, it demands that kind of investment month after month with no payout until the victory bell rings and you score that coveted first page placement.

PPC, on the other hand, gives you your traffic the same day it takes your money. Your conversions happen immediately, which means (if your PPC management team has set things up correctly), you’ll make more money than you spent — and in modern web-based business, that’s the definition of success.