Let’s take an example: Suppose you are running some local services in your area. You will have 2 types of clients: Direct and Indirect.
The direct clients are those who comes to you asking for a service of yours. In this scenario all the money from the client goes to your pocket.
But in contrast to the Direct client, an Indirect client may come through an agent who will first charge from the client and will give you a portion of money for using your service.
So...
Which one would you prefer?
Direct obviously, as it will give you a higher profit margin. The same rule applies to the PPC vs SEO logic where Google gives preference to PPC because it is a direct business strategy. An organization gives Google money to show ad for specific keyword and all the money is kept by Google only.
But in case of SEO, Google has to take share of income from the ranked website's ads, where profit margin dips marginally.
And if you are still doubtful, just read these stats:
In the first half of 2015, Google made $36.34 billion in revenue, up 13 percent year over year. Nearly all of it, i.e. $31.6 billion, came from advertising sales only. About $26 million of that came on the company's own sites while only the rest 10 million was derived from other sources.
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