Search Engine Optimization (SEO) Versus Traditional Advertising: A Dollar For Dollar Comparison

With the multitude of marketing choices available today, it is more challenging than ever for business leaders to cut through the clutter and implement a marketing plan that delivers results on a limited budget. As a past leader of a marketing firm, I was often tasked with the challenge of measuring and improving my return on investment (ROI).

As economic conditions continue to remain uncertain, many executives’ gut reactions are to severely cut their once padded marketing budgets. However, many are discovering that this strategy is not a long-term solution. The businesses that are surviving and even prospering during this uncertain economic environment are doing so by investing in innovative marketing strategies that may be outside of the comfort level of traditional marketing tactics. Many businesses have experimented with a variety of online marketing strategies, including some form of email marketing. However, most are unaware that Search Engine Optimization (SEO) can actually produce better results for less money than many other traditional and online marketing tactics.

Although Search Engine Optimization may sound daunting, it is relatively easy to understand. A popular online marketing tactic, SEO improves both the number of visitors viewing a Web site and more importantly the quality of those visitors by targeting key word search results. When prospects search for information online, they are much more likely to navigate a site if it is displayed within the first page of Google or Yahoo.

Businesses who implement SEO put the odds in their favor by making their sites more visible and easy to find for the precise target market seeking information. Online marketing with SEO includes several different components, including selecting appropriate key words and meta tags, as well as web site submission. Most marketers would agree that SEO is the foundation for a well-rounded online marketing strategy.

With shrinking budgets, ROI is being closely analyzed for every marketing tactic. Businesses invest a great deal of time and money to create a method of measuring the effectiveness of each marketing initiative implemented. A common measurement-tracking tool is the cost per marketing impression. A marketing impression is defined as the single instance of an advertisement being displayed. Therefore, the cost per impression is how much money a company spends to display an advertisement to each potential customer.

Starting with the cost per impression, businesses also track and calculate leads, sales and even conversion statistics. From here, successful marketers are able to form effective marketing strategies to allocate money towards the tactics that are producing the best results.

When most people think of ways to market a business, in general they would think of traditional advertising tactics such as print ads, broadcast media and direct mail campaigns. As it is becoming more mainstream, some may even add some sort of Internet marketing services to this mix. However, some marketers would not specifically think of SEO when listing an online marketing tool they have used. To develop an effective marketing strategy it is important to review all traditional and online marketing options and how they compare with cost per impression to ensure that the tactics selected will produce the highest ROI.

Here is a breakdown of traditional marketing tactics of television, print and radio advertising, their benefits and shortfalls, as well as examples of costs per impression for each medium.

Even with the prominence of new technology, such as computers and iPods, watching TV remains one of the most popular leisure activities for Americans. Because of the familiarity of watching TV, marketers often turn first to television advertising to sell their products or services.

Television advertising is especially beneficial for products that are not easily understood and need to be physically demonstrated or seen to showcase their benefits. Additionally, it allows a company the flexibility to be creative by developing a personality or brand for their product/service that can be portrayed using both sight and sound. However, television advertising is not appropriate for all businesses. It can be very expensive, both for the production of a quality commercial advertisement (which is essential for the highest effectiveness) as well as the placement of the spot itself.

Additionally, with the prominence of DVR and Tivo®, many viewers are now skipping past commercials and may watch an entire program without seeing a single advertisement. Even with the use of these new digital recording devices, however, the prices of television advertising remain costly. For example, a 30-second spot on an American Idol “results show” on Wednesday night with 22.9 million viewers costs $705,000. However, since the number of viewers is so high, this calculates down to $0.031 per impression.

Print advertising includes both newspaper and magazine advertising and it is appealing to marketers because print ads are relatively inexpensive to produce and they can also be changed out quickly, especially with newspaper advertising. However, with more and more people now accessing their reading material online, print advertising offers a very limited audience. Also, it can sometimes be difficult to guarantee specific placement in a publication without paying a premium price. Despite these drawbacks, print advertising is still a widely popular part of most business’ marketing plan. But how does it compare in cost? Just to give an example, a full-page ad in the New York Times (Sunday edition) costs $145,278 and reaches 1.65 million people. This calculates to $0.088 per impression.

It is estimated that around 280 million people own radios, thus radio advertising is often found as part of a business’ marketing mix. Radio advertising is appealing because it is relatively inexpensive to produce and it can reach a wide audience. However, because there is no visual component to radio advertising, it is often hard for listeners to retain the information in the advertising message.

Many listeners do not even listen to commercials and often switch stations when commercials begin. Furthermore, a large segment of population only listens to XM radio, Sirius satellite radio or their personal iPods. Surprisingly, the cost of radio has not decreased even with the competitive advances in technology. For example, a 30 second spot on KCBS-FM (which is an adult hits station in Los Angeles that has 1.4 million listeners per week, or 4,167 listeners during any one 30 second period) costs $1,083. Although this cost may at first appear low, the cost per impression is actually $0.26, which is significantly higher than the print and TV advertising examples analyzed.

Compared to the examples of traditional marketing tactics outlined above, online marketing with SEO can produce a lower cost per impression. More importantly, prospects that view SEO results are much more targeted than those of traditional marketing tactics. Based on our client's benchmark performance and average impressions of 670,000 per month, a monthly investment of $2,750 for SEO calculates to only $0.004 per impression.

It seems like a “no brainer” that if SEO produces one of the lowest costs per impression then all companies would be taking advantage of this online marketing tool. In reality, though, SEO is often overlooked. Most business executives will agree that in general online marketing is the most cost effective form of advertising, delivering higher conversion rates and more qualified leads and sales.

Although many companies invest in Search Engine Marketing (SEM), they only allocate money towards pay-per-click advertising or some other form of paid online placement. However, a vital and often more cost-effective component of SEM is SEO. It is often not included as part of an overall marketing strategy because it is not something that business leaders are completely familiar and comfortable with.

Many marketers understand the traditional marketing tactics of print, radio, television and direct mail. Not nearly as many truly consider themselves savvy with Internet marketing services, and SEO is a dynamic concept that can be hard for some to grasp. Additionally, SEO is often overlooked simply because marketers do not take the time to research how it compares to the costs of more traditional tactics or even other online marketing tactics.

Although the low cost per impression of online marketing with SEO is appealing, there are many additional benefits. Unlike TV commercials or print ads that are published once a week, SEO is “always on” 24 hours per day, seven days per week. Additionally, only those users who are searching for specific terms see the listing, making it significantly more relevant than any of the above listed tactics.

More importantly, online marketing with SEO targets Internet searchers that are already in the mindset of looking for information rather than people who may be passively flipping through a magazine or watching TV. Lastly, prospects that search for products and services online automatically assume the top links listed in the search results are the links to the most reputable companies. Being among the top listings implies a certain level of quality, therefore enhancing a company’s overall brand.