It amazes me that people still ask this question, the answer that benefits most is not which one is best, more so, knowing which method to use when! Remember SEO is not a replacement for PPC & visa versa, these are two distinct marketing channels, each with their own pros & cons. When combined & used strategically, the results can be extremely powerful, however if put together without much thought, then the results can be a really sad (& expensive) affair.
A quick pro & con overview might help out here:-
PPC Advantages
Get your AD on page 1 within hours
Ability to switch Ad on & off as required
High level of control over Ad text & landing pages
Excellent for short term, seasonal or getting rid of stock campaigns
PPC Disadvantages
Running this long term may prove quite expensive
Running PPC is becoming complicated with external factors now affecting your AD performance
ROI affected as cost per click becomes more costly over time
Highly competitive key phrases will be very expensive, therefore not an option for all
SEO Advantages
More cost effective / affordable over time
Recognised as a must have for any going concern business
No pay per click, therefore all traffic result is free
Excellent ROI with targeted key phrases
SEO Disadvantages
Can take months to gain viable search engine visibility
Requires the website design, coding & text to conform to Search Engine criteria
Not built nor applicable for short term campaigns only i.e. seasonal
There are many more for both sides of the argument but the above should provide ample idea. Therefore, next time you have this question pop up, just change it to "Which way is best for my business?" When you arrive at this question, contact us, because we are sure we can help you arrive at the right answer!