As more and more businesses seek to attract more customers using the Internet, their owners get confused about such terms as “organic traffic” and “paid traffic”. Well here’s what the terms mean, the advantages and disadvantages of both and how to include both into your small business internet marketing plan.Organic TrafficJust as the name implies, traffic generated organically is that which arrives at your site a natural byproduct of just being in business and doing business. As the name of your business and your products and services are spread around on the Internet, it will become increasingly recognized. For example, the more places you have listed your company and the more links are on pages around the net pointing to your website, the higher its name will be listed on the major search engines (Google, Yahoo, and Bing).Each reference to your company, especially its listing in directories and search engines, has an accompanying keyword or keywords under which the name will be ‘filed’ when the reference to it is located. The more such references it gets, the higher and higher the company name will be ranked. When an Internet visitor does a search on a specific keyword, such as “plumbers in Pittsburgh”, the search engine refers to its files and displays, down the center of the page, each of the names that are in its index which closely match the requested term. If your company name has more and more relevant references than others, it will likely be listed first.Since few people look much beyond the first page of search results, it really can pay to have a tremendous quantity of good references to your company. This will help your company to be listed within the first 10 results and thus allow you to capture the treasured page one spot in your category!Therefore, by heavily promoting your company through articles about your products and services, directory listings, video publications, forum posts, blog entries, etc., you can really ‘push’ your company name to the top of the organic search engine rankings. This, of course, is free of cost, except for the time and energy that is put into creating such a buzz.Paid TrafficThere are several ways that you can purchase traffic on the Internet. Some are more effective than others and some can be very costly.The most common is a process called “Pay Per Click”, of which Google’s AdWords program is the most often used. In these programs, you (the advertiser) establish a small 4 line ad, a video ad or a banner ad, and have some associated keywords. Whenever a search is made on that keyword (or other related keywords), your ad is displayed free of charge on the rightmost column of the search results page. The order in which those ads appear is based on the relevance of your ad and the page to which you wish traffic to be directed (your quality score) and the amount you are willing to pay to get the associated traffic.There is sort of an auction on ad placement and ads can cost from 15 cents to $20 or more per click. That depends on the competitiveness of your respective market and the keywords being used. By doing some exhaustive keyword research, you can usually find some keyword phrases which will target your traffic effectively and will cost less than more generic, industry-wide terms.Pay-Per-Click programs can be used very effectively, but they must be closely monitored or they can quickly get out of hand. Google, for example, allows you to establish a daily limit of the amount that you are willing to spend on advertising each day and when you reach it, your ads will automatically stop appearing. Pay Per Click is nice since you pay absolutely nothing unless and until someone clicks on your ad and is directed to your site.Other paid traffic sources involve placing banner ads on various websites and newsletters in your industry category. These are usually charges for on a CPM or cost per thousand impressions. That means if a site is viewed by 35,000 people, then your ad will have 35,000 impressions and you will pay for the ad based on the number of people to which your ad is displayed (rather than taking any action).You can also pay for listings and ads in various trade publications, both online and in the more traditional, printed media.Time Until EffectiveWhen creating a small business Internet marketing plan, it is really important that you consider and allow for a mixture of organic and paid traffic sources. The more time and energy you are willing the put into creating a buzz in the organic arena, the less you will need to spend on paid traffic sources. Recognition of your company on the organic side of things can take quite a long time, depending on the effectiveness of your marketing blitz. If you need or want to have targeted traffic really quickly, then you will need to use some amount of Pay-Per-Click advertising. You can get traffic from Pay-Per-Click within a few hours, but it will cost you a few dollars.Your Cost Per AcquisitionIn order to properly determine your Internet marketing budget, you really need to have a good understanding of what it presently costs you to get a new customer to your business. This is called your Cost Per Acquisition or CPA. If you were to simply determine the number of new customers you had last year and divided that by your marketing cost, that would give you a rough CPA. For example, if you attracted 500 new customers last year and your marketing cost was $20,000, your CPA would be $40 (20,000 customers divided by $20,000 cost).You can then experiment using Pay-Per-Click to see if you can attract customers using that method for less than $40 each. It may take you, for example, 1,000 visitors at $.25 each to get 30 real prospects and 7 new customers, so your CPA for that would be $36. (1,000*.25=250 divided by 7 new customers=$36). While the $36 CPA would be good, you also have to consider the additional 23 targeted prospects that you now have on your marketing list. These are an added benefit that will likely mean some additional new customers over time, as you market to them.Working Your PlanIf you work at your small business Internet marketing plan very logically, you will first determine your current CPA and then design the proper balance of organic and paid traffic that will keep the new customers coming to your business!