Organic vs. paid marketing: what’s the difference, and how should you spend your budget?

| By:
Scott Marshall

In this post, we’ll explore the basics of paid and organic marketing, the pros and cons of each approach, as well as which you should use and when. (Spoiler: a careful balance of both is recommended for optimal results)

What is organic marketing?

In the food industry, organic tends to mean that something is all-natural, grown without any enhancements, just straight out of the ground. Similarly, organic marketing (also known as inbound marketing) has a ‘homegrown’ quality to it. It’s driven by good content that draws people to it naturally, without having to buy eyeballs.

Essentially, the idea is to give before you get. Common inbound marketing tactics companies use today include search engine optimization (SEO), blogging, and social media—all of which work together to drive traffic to your website.

HubSpot estimates that organic marketing costs 61% less per lead than its outbound counterpart. For small businesses or startups, those savings can be a game-changer—but to reap them, you’ll have to be patient. Reese Ormand, CEO of TechVera, a ConnectWise partner, said he has seen success with organic marketing, but it’s more of a long-haul strategy vs. the quick wins that come with PPC.

What is paid marketing?

Paid marketing is exactly what its name implies—spending money to advertise your business. It includes both offline and online tactics like trade shows, conferences, seminars, lunch ‘n’ learns, email blasts, and more traditional forms of promotion like magazine ads.

But as much as in-person marketing efforts like trade shows still matter, the digital space is quickly becoming the standard for outbound marketing. You might see it called paid search, pay-per-click (PPC), cost-per-click (CPC), search engine marketing, or sponsored posts, but while each tactic is different, the endgame is the same—to have your marketing message pushed to the top of search results.

What are the pros and cons of paid and organic marketing?

Ormand says organic marketing is more pull, less push. “You’re going to pull them into your marketing message,” he said on a recent episode of the 'Stories From The IT Nation' podcast. “You’re going to show them value. Traditional advertising is more like you’re just pushing your stuff out there.”

But while it may not require as much money to create an organic marketing campaign, it does require just as much time and up-front strategy as more traditional methods—and maybe even more. Ormand said time-consuming steps like developing buyer personas, brainstorming and creating content that they’ll consider shareable, and crafting relevant calls-to-action (CTAs) are more important than ever.

And for companies like TechVera, where bits and bytes rule the day, Ormand said the difference between success and failure is remembering to speak the customer’s language—not yours. “At the end of the day your marketing message needs to be about the results you’re going to provide for your clients,” he said. “That’s what they want to understand.”

With a lot of patience and consistency, the results of organic marketing can be exponential, according to Ormand. “It’s kind of a snowball effect in a positive way,” he said. “What you’ll get back in leads and traffic from that single piece of content is amazing, and it’s free,” he said. Your content starts to drive traffic to your site, which in turn pushes you up the search-ranking index, which then gets you even more visibility.

Paid marketing, on the other hand, is sometimes referred to as outbound or push marketing. Whereas organic marketing tactics like SEO take a longer time to see results, a PPC campaign can put a business on the first page for a search term in just a day.

In fact, seven million advertisers invested a collective $10.1 billion in PPC ads in 2017 alone, largely because they’re a far-reaching and fast way to grow awareness and generate leads. And paid search isn’t going anywhere. The industry is predicted to reach $123 billion by 2021, accounting for 18% of total ad spend.

An added benefit of using paid marketing is the ability to home in on your target audience. For example, within Google Ads, you can identify the terms people use to search for businesses like yours—and even target those prospects further by their location, device type, and other factors. And the instant you find out what ads are working (or not working) it’s easy to adjust and optimize your campaigns for the best performance. Unlike the slow build of organic marketing, paid search is quick and nimble, allowing you to respond in real-time to the market.

Although the debate around paid vs. organic marketing has carried on for some time now, many forward-thinking marketers are discovering that the real question isn’t deciding between one approach or the other—but rather figuring out how to combine the two for the biggest impact.

Blending paid and organic marketing on a budget

How much should you spend on marketing? For businesses that earn less than $5 million a year with a net profit in the 10-12% range, the US Small Business Administration recommends spending 7-8% of gross revenue on marketing efforts across the board. Other experts take an even more conservative approach, recommending that only 2-5% be spent on marketing.

After going through a ground-up rebrand of his company, Ormand’s marketing strategy included a mix of both paid and organic marketing. Along with teaming up with a professional marketing partner, their budget included:

  • Developing highly repurposable content
  • Hosting lunch ‘n’ learns to establish authority
  • Public-speaking gigs at local networking events

“We’re scrappy, so this is what I like thinking of as a multi-pronged attack,” Ormand said. “It takes time, it takes effort, but it’s going to be a whole new avenue of lead generation for us.”

Whether you stick with free, organic options, or invest in paid marketing to expand your network, you’ll need to consistently share relevant, high-quality content to engage your audience. To learn more about crafting a sales and marketing strategy that works for your MSP business, download The Ultimate Guide to Sales and Marketing.