When small companies fall for SEO they are usually being fleeced. That is, the real payoff is in having the products that folk want at a fair price and superior service.
Look at Amazon. They don't have the lowest prices yet are doing very well and it's not SEO.
Due to the constant algorithm changes, is it now more cost-effective for local companies to use PPC campaign versus trying to rank locally?
I would say no, in most cases. It completely depends on your business model and industry and the current level of competition. Google just launched Adwords Express+ and this will drive everyone’s cost even higher over time in local ads. So, if you have a solid organic strategy in place compared to churn and burn, I think your organic side exponentially grows whereas the only way to grow PPC is to spend more. Deserve your opinion….