SEO vs Google Ads: Where Should You Spend Your Budget First?

If you’re running a business in 2025, you’ve probably asked yourself the same question that many Australian business owners face:

Should I invest in SEO or Google Ads first?

Both channels can drive traffic, leads, and sales. Both are trusted by businesses big and small. However, they work very differently, and choosing where to spend your initial budget can make or break your marketing results.

In this guide, we’ll walk you through:

• The real differences between SEO and Google Ads (beyond the surface-level comparisons).
• A simple decision-making framework based on where your business is today.
• Budgeting tips for balancing both channels over time.

By the end, you’ll have a clear understanding of where to start and why the right choice depends on your growth stage, not just the tactics themselves.

Firstly, What is SEO?

Search Engine Optimisation (SEO) is the process of improving your website’s visibility in Google’s organic (unpaid) search results.

When done well, SEO increases the number of people who find your business when they search for relevant keywords, without paying for each click.

Key benefits:

• Builds long-term visibility and authority.
• Generates consistent traffic once rankings are established.
• Compounds over time — unlike paid ads, it doesn’t “turn off” when you stop spending.

Key considerations:

• SEO requires time (often 3 to 6 months) to see meaningful results.
• You’ll need content, technical improvements, and ongoing optimisation – best left for a professional to do, which can cost monthly fees.

What is Google Ads?

Google Ads (formerly Google AdWords) lets you bid to display ads at the top of search results and across Google’s display network.

You choose keywords, create ads, and pay each time someone clicks.

Key benefits:

• Immediate visibility – your ads can start appearing within hours.
• Highly scalable and flexible for promotions or seasonal offers.
• Allows precise targeting based on location, device, audience, and more.

Key considerations:

• You pay for every click, and costs can rise in competitive industries.
• Traffic stops as soon as you stop funding the campaign.
• A professional to manage your Google Ads is an additional cost on top of your ad spend.

Pros & Cons: SEO vs Google Ads

Both SEO and Google Ads can generate traffic, leads, and sales, but the way they do it and how sustainable they are differ significantly.

Factor	SEO	Google Ads
Cost & ROI Considerations	ROI improves significantly over time as rankings solidify and traffic becomes essentially free apart from maintenance. Early ROI can appear low due to upfront investment of money and time (if engaging someone) and delayed results.	ROI can be immediate, but it is tied directly to ad spend. Profits must outpace CPCs, and ROI can decline as competition drives costs up. Again, engaging an Ads Specialist or your time is an additional cost to factor into your ROI.
Time to Results	Slow initial ramp-up (3–6 months or longer), but results can compound for years.	Immediate visibility. You can start driving traffic within hours of launching a campaign.
Trust & Authority	High. Organic rankings are seen as earned and build significant consumer trust over time. (The average CTR for the top-ranking organic results can be as high as 39.6%)	Low. Ads are clearly marked and often seen as promotional, which can reduce trust with some audiences. (The average CTR for Google Ads across all industries is around 1.91%)
Scalability	Grows steadily but requires ongoing work and patience. It can become the highest ROI channel in the long term.	Highly scalable. As long as you can afford the cost per click, you can grow traffic quickly.
Competitiveness	Varies widely by industry and keyword. It can be mitigated with long-tail keyword targeting and a smart SEO strategy.	Auction-based. The more advertisers bidding on your keywords, the higher your costs, often driving up CPCs in competitive markets.
Learning Curve	Moderate to high. It requires an understanding of technical SEO, content strategy, and continual algorithm updates.	High. Campaign setup is simple, but ongoing optimisation (bidding, targeting, ad creative) is complex and constantly changing.

What Stage is Your Business At? (A Simple Decision Framework)

When business owners come to me for a discovery call, they’re often weighing up exactly what we’ve discussed, whether SEO or other marketing, such as Google Ads, is the right first step. I’ve worked with businesses at every stage, from startups with no online footprint to established companies looking to overhaul their marketing strategy.

While I approach these conversations with an SEO specialist’s lens, I’m also transparent when SEO isn’t the best fit. If SEO would eat up their entire marketing budget (which should ideally be split across multiple channels), or if they need leads faster than SEO can deliver, I’ll say so.

Here’s how I typically assess where a business is and what makes the most sense for them:

Scenario A: New Business / New Website

What I often see:

• No online presence yet.
• Brand new website – typically homemade (FYI, nothing wrong with this! The very first 5 Twelve website was pumped out by me and ChatGPT in 3 days).
• Minimal or no existing traffic.
• Urgent need for leads to generate cash flow.
• Minimal marketing budget to start.

Questions I ask:

• How quickly do you need leads to start flowing?
• Who are your main competitors, and what are they doing well online?
• What is your overall marketing budget (not just SEO)?
• Do you have any capacity to manage parts of your marketing yourself?

My typical recommendation:
Start with Google Ads or paid social to drive immediate leads while using a small portion of the budget to build a future SEO foundation (e.g., technical site setup, keyword research, and basic content). SEO at this stage should not consume the entire budget.

It may be ideal to have an SEO specialist jump in for a once-over to ensure you’ve got GA4, GSC, and basic standards in place for your website, so that your Google Ads (which direct people to your website anyway) can understand who you are, what you do, and how to get in touch/book/purchase.

Scenario B: Established Business Without SEO

What I often see:

• A website that might rank for branded searches but little else.
• Some online presence, typically with listings on local directories and social media. If the business has been around for decades, it may already have some SEO skin in the game for simply being a long-term trusted brand.
• A dependence on Google Ads to drive leads like a tap that turns on when needed and off when busy. Typically managed by staff in-house with little marketing knowledge.
• An ancient website that likely needs a rebuild or complete refresh.

Questions I ask:

• How much are you currently spending on Google Ads each month or financial year?
• Are you keeping track of where your leads are coming from?
• How many customers/sales/jobs would you need to see to cover the cost of an ongoing SEO campaign and release some budget from Google Ads?
  • For reference, I hammer this point a lot on calls and in my blogs. 
  • As a business owner or manager, I believe you should have calculated KPIs for any marketing campaign you’re about to undertake. Learn more about this in my recent blog post on the costs of SEO.

Common recommendation:
In this stage, most businesses are ready to reduce dependency on paid ads and build organic visibility. This might first need a complete website rebuild or refresh, which can eat up an initial budget of $5,000 to $10,000+. 

The recommendation ultimately depends on the numbers. I look at how much is currently being spent on Google Ads, what portion of that spend could be offset by winning organic traffic, and whether the business can afford to split its budget between SEO and paid search without sacrificing lead flow.

If the math stacks up, I suggest starting SEO alongside a fresh website or SEO-ready site upgrade. If the budget is too tight, maintaining paid ads while preparing for SEO growth (such as creating a content plan or fixing technical issues) may be the smarter short-term path.

Scenario C: Established Business With Some SEO Momentum

What I often see:

• The business has worked with an SEO provider in the past or dabbled in SEO in-house.
• Ranking for a handful of keywords (usually branded terms and a few industry-specific ones).
• Organic traffic brings in some leads, but not consistently or not for the right search terms.
• Either no current SEO strategy or one that hasn’t been revisited in years.
• Google Ads or other paid campaigns are still doing the heavy lifting for lead generation.

Questions I ask:

• What SEO work has been done in the past (if any), and what results did you see?
• Are you tracking what organic search terms are driving leads?
• How does your current SEO visibility compare to your key competitors?
• Is your website converting the organic traffic you do get?
• Do you want to maintain or increase your Google Ads budget while growing SEO, or eventually reduce paid spend?

My typical recommendation:
At this stage, most businesses are ready for a more strategic, focused SEO campaign. They’ve seen that organic leads can come in, but growth has either plateaued or never quite taken off.

I usually recommend an SEO strategy that starts by auditing past work, identifying what’s worked, what hasn’t, and where the biggest gaps are (usually content strategy and authority building).

For brands with a larger marketing budget, an investment in both SEO and Google Ads can be a healthy synergy, with SEO efforts complementing Google Ads, and vice versa. Again, the budget percentage split depends on the budget of the business and the short and long term goals they’re looking to achieve.

Budgeting and How to Balance Both Channels

Many businesses make the mistake of thinking they need to pick either SEO or Google Ads.

In reality, the smartest strategies blend both, but how much of your budget to allocate to each depends entirely on your business’s current stage, goals, and cash flow.

Here’s how I generally advise splitting budgets:

Business Stage	Recommended Budget Split
New Business / New Website	70% Google Ads / 30% SEO (or SEO setup only)
Established Business Without SEO	60% Google Ads / 40% SEO (transitioning toward more SEO over time)
Established Business With SEO Momentum	40% Google Ads / 60% SEO (or more, depending on lead flow stability)

Of course, these are starting points, not hard rules. I’ve worked with businesses that flip the ratio faster because they’re eager to reduce ad spend, and others that maintain a 50/50 balance long-term because it fits their cash flow and growth model.

Pro Tip: If you ever find yourself in a position where SEO would eat up more than 70% of your entire marketing budget and you rely on consistent lead flow, it’s usually a sign that either:
a) You need to scale back the SEO scope temporarily, or
b) You may not be ready for a full SEO campaign just yet.

The Hidden Costs (and Savings)

Both SEO and Google Ads come with hidden costs that aren’t always obvious to business owners until they dive in.

SEO’s Hidden Costs:

• Time and patience. Results take months, not weeks.
• Content creation. Even with a technical SEO campaign, most businesses will need regular, high-quality content to grow.
• Technical upkeep. As your website evolves, technical SEO must be maintained. This may require a web developer at your beck and call in addition with an ongoing SEO specialist.

Google Ads’ Hidden Costs:

• Ongoing spend. You pay for every click and there are no compounding benefits like SEO.
• Management time or fees. Whether you manage campaigns yourself or hire an expert, Ads require constant optimisation.
• Increasing CPCs. As competition grows, so does your cost per click.

Long-Term Savings:

• SEO can become your highest ROI channel once rankings are established. I’ve seen businesses cut ad spend by 50% or more after successful SEO campaigns.
• Google Ads remains invaluable for immediate lead generation, new product launches, and staying visible while SEO builds momentum.

Final Thoughts – My Advice as an SEO Specialist

Every business wants the best return on investment. But the right channel depends on your business’s growth stage, lead urgency, and cash flow.

While I specialise in SEO, my goal isn’t to push businesses into SEO campaigns they aren’t ready for. Many times, I’ve told potential clients to start with another marketing channel or improve their website first before considering SEO. Long-term partnerships only work when the strategy is realistic, sustainable, and profitable.

If you’re not sure where to start, I’m happy to review your current situation and provide a complimentary strategy session to determine if SEO, Google Ads, or a blend of both makes the most sense for you.