SEO vs PPC, Where to spend your money?

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With the short time I have spent in social media marketing classes and watching Krista LaRiviere and Marcus Sheridan’s videos, I wonder why so many marketing dollars are spent on PPC rather than SEO, when SEO is so much more successful and less costly. I also wonder what will happen when most organizations figure this out and start shifting their resources to SEO.  It seems individuals trust organic websites that have been vetted by Google (have relevance) than a paid add.  The graph below shows some results.  When using SEO, you must think of results for the long term and possibly use PPC for campaigns with in your long term plan.

How will companies that depend on PPC find new revenues?