Which delivers faster growth: SEM or SEO?

For early-stage startups in Australia, the choice between search engine marketing (SEM) and search engine optimisation (SEO) often comes down to urgency versus sustainability. SEM—typically through platforms like Google Ads—can deliver immediate traffic and leads. This makes it attractive for founders under pressure to demonstrate traction to investors or hit revenue milestones quickly.

According to recent data from Statista, the average cost-per-click (CPC) in Australia for Google Ads across industries has risen to over AUD $3.20 in 2024, a 12% increase from the previous year. This inflation in paid media costs means that while SEM can deliver fast results, it’s becoming less efficient unless campaigns are tightly optimised.

SEO, on the other hand, is a long-term strategy. It involves building domain authority, publishing high-quality content, and earning backlinks—efforts that may take 3 to 6 months to show tangible results. However, once momentum builds, SEO can drive sustainable, compounding traffic at a lower cost per acquisition (CPA) than SEM.

One example is Canva, the Sydney-based design unicorn. In its early growth phase, Canva invested heavily in content marketing and SEO, targeting long-tail keywords like “free infographic maker” and “social media templates.” This organic strategy helped them scale globally without relying solely on paid ads.

In short, SEM is ideal for quick wins and testing product-market fit, while SEO is essential for building long-term visibility and trust. Most successful startups in Australia use both—but sequence and strategy matter.

What are the risks of choosing the wrong channel too early?

Choosing the wrong growth channel at the wrong time can burn cash, stall momentum, or worse—signal poor strategic judgement to investors. Startups that over-invest in SEM too early may see a spike in traffic but fail to convert due to weak landing pages or unclear value propositions. This leads to high bounce rates and wasted ad spend.

Conversely, relying solely on SEO in the first 6 months can leave a startup invisible during its most vulnerable phase. Without traffic or data, it becomes harder to iterate the product or validate demand. This is especially risky in sectors like fintech or healthtech, where trust and visibility are critical from day one.

Vello, a Melbourne-based startup offering AI-powered mental health support, initially leaned heavily on SEM to drive app installs. But according to co-founder James McLennan, the team quickly realised that without a strong SEO foundation, their customer acquisition costs were unsustainably high. They pivoted to a hybrid strategy—using SEM for targeted launches and SEO to build authority in mental health content.

Another risk is platform dependency. Startups that rely solely on Google Ads or Meta Ads risk exposure to algorithm changes or policy shifts. In 2023, Telstra experienced a 22% drop in paid search ROI after Google’s AI-driven ad ranking update, according to internal reports cited by The Australian Financial Review.

This means that startups must think beyond short-term growth hacking. A balanced approach—where SEM fuels quick testing and SEO compounds over time—is often safer and more capital-efficient.

What does this mean for startup marketing in Australia?

Founders must align channel choice with stage and runway. In pre-seed or seed stages, SEM can help validate messaging and attract early adopters. But as the startup matures, SEO becomes a strategic asset that reduces reliance on paid media.

Australia’s digital landscape is shifting. With Meta’s ad targeting capabilities constrained by privacy regulations and Google’s AI Overviews changing how search results appear, organic visibility is becoming harder—but also more valuable. Startups that invest early in SEO are better positioned to adapt to these shifts.

Government-backed programs are encouraging digital maturity. The Australian Small Business Advisory Services (ASBAS) program now includes SEO training and digital strategy workshops, recognising the importance of organic growth channels for small and early-stage ventures.

Growth hacking is evolving. It’s no longer just about quick wins. The most effective growth strategies in 2024 blend fast feedback loops (via SEM) with durable assets (via SEO). This hybrid approach is evident in how startups like Atlassian and SafetyCulture structure their marketing teams—often with dedicated SEO leads working alongside paid media specialists.

Ultimately, the SEM vs SEO debate is less about choosing one over the other and more about sequencing intelligently. For Australian startups navigating limited budgets and rising acquisition costs, this balance could define their trajectory.

How does Australia compare to global startup ecosystems?

Compared to Silicon Valley or London, Australian startups tend to adopt SEO later in their growth journey. This is partly due to smaller local markets and a historical reliance on paid channels to scale quickly. However, with the rise of AI-driven search and the globalisation of SaaS, Australian founders are increasingly prioritising organic visibility from the outset.

For example, Berlin-based startup Pitch launched with a content-first strategy, ranking for high-intent terms like “presentation software for startups” within months. Australian equivalents are starting to follow suit, recognising that global SEO reach can offset the limitations of the domestic market.

In short, while SEM remains a valuable lever, the global trend is clear: sustainable growth increasingly depends on organic search authority. Australia is catching up—but the most successful startups are those that adapt early.

What’s the smarter move for your startup right now?

If your startup needs fast results—say, for a pitch or product launch—SEM can deliver. But if you're building a brand meant to last, SEO is non-negotiable. The smartest move? Use SEM to test, learn, and iterate, while investing in SEO to build long-term defensibility. The timing, not just the tactic, is what separates growth from stagnation.