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SEO vs. Paid Ads: Where Digital Marketing Agencies Are Investing in 2025

For over a decade, digital marketing has wrestled with the question of which is more effective in generating return on marketing investment: SEO or paid ads? While SEO is most effective in bringing long-term, compounding traffic at lower costs, paid ads offer quick visibility and laser-focused targeting.  The tradeoff between quick wins and sustainable growth […]

For over a decade, digital marketing has wrestled with the question of which is more effective in generating return on marketing investment: SEO or paid ads? While SEO is most effective in bringing long-term, compounding traffic at lower costs, paid ads offer quick visibility and laser-focused targeting. 

The tradeoff between quick wins and sustainable growth has become even more strategic in 2025.  This is AI-driven search and privacy-focus is leading to rapid search volatility, technological shifts, and rising costs. Marketers need to approach marketing mix much more strategically, keeping in mind increased efficiencies combined with increased resource investment to offer continued ROI on marketing spend.

Read on to learn about:

1. The latest trends shaping SEO and Paid Ads in 2025
2. Where agencies are shifting their budgets, and why
3. How smart agencies are blending both strategies for maximum impact

So whether you are exploring SEO & paid advertising for your own business or if you are a digital marketer refining your marketing mix, this article will help you stay ahead of the rules of search visibility—and how to win in 2025.

The Age-old Debate: A Recap

First, let’s do a recap on the age-old debate between SEO and Paid Search Ads. SEO is lower cost & sustainable with long-term returns. Paid advertising brings almost immediate search visibility but has higher ongoing spend more because in addition to paying for advertising services, you also need to pay for media buys. 

SEO is evergreen or at least brings longer lasting results even if you were to pause SEO activities – not recommended though as sooner or later, depending on how competitive your organic search market is, your organic visibility will start to suffer. Paid ads, on the other hand, will completely eliminate you from search results the minute you decide to pause your campaigns.

Finally, attributions are much more easily available with paid advertising, when compared to SEO due to pixels & UTMs which allow very precise attributions. SEO also allows for aggregate attributions, but you run into an issue if you want very granular attributions due to privacy issues.

The State of SEO in 2025

Here are the biggest drivers of SEO strategies in 2025:

AI Overview: Google’s Search Generative Experience (SGE), aka AI Overview is bringing generative AI capabilities into search. Generative AI is poised to change the way search engines work and is the biggest search technology breakthrough in 25 years! 

Google says: “With new breakthroughs in generative AI, we’re again reimagining what a search engine can do. With this powerful new technology, we can unlock entirely new types of questions you never thought Search could answer, and transform the way information is organized, to help you sort through and make sense of what’s out there.”

Google is not the only search engine experimenting with gen AI in search models. The new Bing, powered by ChatGPT, is already in business. Facebook, a digital media giant, although not technically a search engine, is also experimenting heavily with AI with its rollout of Meta AI. And if you have done a search on Facebook or Instagram, you have probably come across Meta AI. Meta’s AI is getting remarkably good at understanding user intent and content quality through behavioral signals. 

Zero Click Searches: Personally, I find AI Overviews incredibly convenient for informational searches—I rarely click through to a website unless I want more detail.  This behavior aligns with broader user trends; a 2024 study by Spark Toro & Datos found that approximately 58.5% of Google searches in the U.S. result in zero clicks, meaning users find the information they need without visiting any external sites .

However, transactional or commercial keywords are a different story. People may still scan AI overview to see recommendations but they would click on the recommendations to complete a transaction, fill a lead form, make an ecommerce purchase, watch a video, or call a business. This is also backed by data. Notably, AI overviews predominantly appear for informational queries; a study by Workshop Digital revealed that 80% of keywords triggering AI overviews are informational in nature, while transactional and commercial keywords are less likely to generate such summaries .

Experience Expertise Authority & Trustworthiness (E.E.A.T.): Google’s emphasis on E.E.A.T. remains foundational—especially for health, finance, or other “Your Life or Your Money” (YMYL) topics. This is not a new phenomenon. The first time Google unveiled this update was in 2018. However, as AI Overview has become the overarching lens through which much of the open web is accessed, E.E.A.T. has become even more critical for search visibility.

In my personal experience, our SEO clients, in industries as diverse as health, B2B or home services, establish experience, expertise, authority and trustworthiness through deep, informative backed clear authority signals—such as references to trustworthy sources, author’s credibility, reviews and engagement.

Now that we’ve established that SEO in 2025 demands better and more, how does one then gain visibility on search engines?

For Google: Our strategy has centered on a mix of comprehensive, authoritative content  combined with simple, easy to follow content that directly answers user queries.

For Meta: We prioritize content that drives meaningful engagement and social interaction.

The State of Paid Ads in 2025

Just like AI-led paradigm shifts in SEO, paid ads are evolving to meet new privacy standards and are offering AI-driven targeting & ad optimizations for improved performance. 

Privacy Standards: Google Ads is leading with enhanced Consent Mode v2 and cookieless audience modeling, fundamentally reshaping how conversions are tracked. Similarly programmatic platforms are shifting toward contextual targeting and privacy-compliant identity solutions like UID 2.0 as third-party cookies fade out. Facebook / Meta Ads are offering Conversion API solutions to adapt to iOS Intelligent Tracking Prevention (ITP) limitations. LinkedIn Ads are also leveraging first-party data and engagement retargeting to improve ROI.

Rising Cost Per Click: Cost per click (CPC) is going up in nearly all major ad platforms in 2025 because of a combination of factors: increased competition, more and more marketers entering the digital space, diminished tracking accuracy due to privacy policies, and greater utilization of AI-driven bidding strategies that prioritize conversions over cost savings. 

While some verticals—healthcare, legal, and B2B—have more dramatic growth due to higher customer value and stricter compliance regulations, the trend in general is quite ubiquitous. This rising CPC does not necessarily translate to declining ROI but does raise the bar of campaign efficiency. 

This means, marketers must now optimize more heavily—streamlining target audiences, optimizing landing page conversion, and leveraging first-party data—to gain or boost profitability. As CPCs rise, there is less margin for error, and strategy execution and tracking are more important than ever.

Role of AI in audience targeting, creative generation, and budget optimization: 

In 2025, AI has become a fundamental element of pay-per-click ad strategies, impacting how campaigns are built, tuned, and amplified. To target audiences in a privacy-first world, publishers like Google and Meta are leveraging AI to model user behavior —making use of contextual cues, first-party data, and predictive analytics to connect high-intent audiences even without third-party cookies. 

Creatively, AI technology now generates and proves ad tests in real-time so that advertisers can instantly understand what performs well across formats and platforms. 

Budget optimization is automated as well, with AI adjusting spend dynamically among channels, audiences, and creatives based on performance signals. 

The result: smarter, faster decision-making with less waste and higher ROI—especially critical in an era of rising costs and shrinking attribution windows.

Where Agencies Are Shifting Their Budgets, And Why

In 2025, digital agencies are making increasingly strategic choices about how to divide marketing budgets between SEO and paid media, driven by evolving AI technologies, client goals, competitive index, and industry-specific key performance indicators. In a study published by Digital World Institute, in 2025:

• 89% of digital marketers incorporate both SEO and PPC into their overall marketing strategies.
• 60% of small businesses prioritize SEO over PPC due to tighter marketing budgets.
• 42% of mid-sized companies allocate budgets equally between SEO and PPC efforts.
• 76% of enterprise-level companies run at least three different PPC campaigns alongside dedicated SEO teams.

It is important to note that this ratio shifts radically depending on client type and objectives. At Webtage—-a Google-Partner digital marketing agency in Naperville, that offers SEO Services and paid advertising to its clients—we observe that small enterprises often lean toward SEO, particularly when their target audience requires upfront research to identify a trustworthy provider. On the other hand, businesses targeting high-intent, ready-to-convert searches typically prioritize PPC for immediate results. When budget allows, a hybrid approach combining both SEO and PPC tends to deliver the best outcomes.

Here Are The Industry Budget Trends That We Are Seeing

E-commerce: Paid-heavy—especially Google Shopping, Meta Ads, and TikTok—for immediate conversions, but most brands invest in SEO on product and category pages to reduce dependence on paid traffic.

Healthcare: SEO reigns supreme due to E-E-A-T requirements and regulatory restrictions on ad copy, though paid search and display are still utilized heavily for awareness and appointment-driving campaigns.

B2B: Balanced investments—SEO for thought leadership and organic lead generation; LinkedIn and Google Ads for targeted demand capture and remarketing.

Nonprofits: Lean toward SEO and organic/paid social. However, many nonprofits are leaning into strategic use of paid campaigns for seasonal giving campaigns.

When Agencies Choose SEO, Paid, or Both

Agency leaders favor SEO for clients requiring sustainable long-term growth, increased organic visibility, and authority establishment—especially in verticals like healthcare, where trust and compliance are essential. Paid media, on the other hand, is the preference for lead generation at scale, promotional campaigns, and rapidly expanding reach. Paid media campaigns, especially when combined with a cross channel approach, bring exceptional results to our clients in healthcare, B2B, professional services & much more.

Hybrid strategies are the new normal for a majority of agencies as they seek to capture both short-term demand and long-term search intent while managing risk across channels.

In 2025, however, the debate between SEO and paid advertising isn’t a simple trade-off between short-term return and long-term sustainability. It’s an issue of strategic resource planning that reflects the evolving digital landscape—where AI, privacy regulations, and shifting consumer behavior demand a more advanced approach. Success lies in selecting the right mix of strategies to deliver client goals, be adaptable to change, and demonstrate measurable ROI. For digital agencies, the issue is not choosing between SEO or ads—it’s about how and when to utilize both to their utmost potential.

 At Webtage, we lean heavily on marketing analytics, attribution modeling and lifetime value prediction increasingly to inform clients on best strategies they invest budgets across channels based on both short-term goals and long-term growth opportunities. We are also investing in keeping up with privacy-first attribution technologies to ensure we can continue to monitor campaign performance without losing sight of the returns on investment.

Curious about which marketing mix is optimal for your business? Contact us at www.webtage.com