Since I got into the business of Internet Marketing I've studied the benefits of Organic Results as well as Pay Per Click (PPC) ads. There are numerous articles and studies that show where people click and how they search on Google, Yahoo, etc. Feel free to check out some of these on your own:
http://www.webpronews.com/topnews/2004/11/15/organic-seo-vs-ppc-advertising
http://www.zeroonezero.com/services/ppc-vs-organic-sem.html
http://www.seoresearcher.com/paid-search-marketing-vs-natural-search-promotion.htm
http://www.bitwiselogic.com/blog/Joel+Carlson/11/Pay-Per-Click+vs.+Organic+SEO.html
These articles bring up many valid points. I've been of the oponion that BOTH are effective. PPC for short term success and organic results for long-term success. Studies have shown that nearly 80% of Americans look at the organic results on the left side of the page. That leaves only 20% to click on the PPC. Keep in mind, some of the clicks may be a result of "click fraud" and very expensive. For more information on click fraud check out: http://en.wikipedia.org/wiki/Click_fraud
http://www.news.com/Exposing-click-fraud/2100-1024_3-5273078.html
Now I see that Google's paid ads are decreasing in traffic and becoming more expensive. Think of it this way; when you walk into a casino the number of slot machines far outnumber all the other games combined. Why is that? Its the CASH COW. Slot machines are the biggest money maker for a casino. Yes, you can win. You can also drop a huge amount of cash in a short period of time and get NOTHING in return. http://www.denverpost.com/ci_8371319?source=rss - Paid ads have been the cash cow for Google for a long time.
On the flip side, think of building an effective website that relays your firm's message to prospective clients with custom content that is well optimized. First, you will have a higher rate of conversion because of better content and you are pulling from 80% of the public instead of just 20%. Don't forget you get to keep the content and design because its custom written for you and your firm. Think about it. Most companies that build PPC campaigns can't build an effective website so there isn't any conversion.
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