Nathan Linnell wrote a great blog post at Marketing Pilgrim on the working relationship between SEO and PPC. The bottom line is neither are more important, but they are both necessary for successful internet marketing. While SEO is great at long-range success, PPC is the short-term thinker.
This is a good analogy and it helps to think about it in those terms. Small businesses that have a small marketing budget would do well to start with SEO. You won’t meet with instant success, but get your SEO right and drive traffic to your well optimized web pages through blogging, social media, and articles before you do any PPC. Then, after you are confident you have web pages that will convert, then you can start your PPC campaign. It will do you no good to drive traffic to any landing page through PPC if the landing page won’t convert. You might as well just take your hard-earned money and throw it out the window. So make sure the optimization and conversion rates are where you want them before you try PPC.