As I understand Google SEM CPC pricing, Google considers not only how much the marketer is willing to pay, but also the quality of results, in determining what price puts you in what slot.
So, to a certain degree, your SEO efforts influence your SEM cost.
SEO these days is about:
- relevant content
- relevant links to that content from authoritative sites
- social relevance of the content
- content freshness
- other stuff, like site speed
These things have readily measurable attributes:
- organic search results position
- PageRank
- followers / likes / retweets etc.
- feed update frequency
- response time
So logically, one question you might as a search marketer ask yourself is whether you're globally optimized across your SEO and SEM investments. Should your next dollar go to pay for a click, or to develop and promote and present content that will rise higher directly, and indirectly lower your SEM CPC? This is not an academic question, as collectively SEM and SEO are today big, front-and-center elements of many firms' marketing efforts.
One way to answer this question is to build a model that, for a range of keywords, predicts CPC (as a dependent variable) from different values of the measurable attributes of SEO mentioned above, and perhaps others.
I'm curious about whether anyone's seen or done analysis like this? My quick search on "Optimizing SEO vs. SEM" yielded this interesting SEOMoz result": http://www.seomoz.org/blog/the-disconnect-in-ppc-vs-seo-spending . I think this great article misses however that most of the leverage in SEO comes not from the narrow definition of the term but from developing and promoting great content.
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