Internet Marketing

Why SEO Deserves to Be on Your Marketing Budget

03. 02. 2011

We have witnessed through our workings with clients that Search Engine Optimization (SEO) has provided the best return-on-investment in comparison to other advertising initiatives.  This article will provide data on why SEO is so effective and outline major online studies around internet usage that contributes to its success.

The numbers supporting the use of the Internet

eMarketer's December 2010 study of Share of time spent per day with Major Media study found that people are spending 11 hours per day consuming media.  Of this time TV is still on top. The breakdown looks like this:

  • TV 40%
  • Internet 23.5%
  • Radio 14.5%
  • Mobile 7.5%
  • Newspapers 7%
  • Magazines 4.5%
  • Other 3%

In a similar study Forester found that people are spending as much time Online as they are watching TV. Forester found that number to be 13 hours per week on the two activities.

According to a 2007 MarketingSherpa Inc. study, 52% of people find retailers by searching for products using Google, Yahoo and other popular search engines. Word of mouth through family, friends, and colleagues resulted in only 17% of the traffic to a site and advertising on TV, radio, newspapers and magazines only 14%.  Email newsletters had only 9% and advertising on another website 6%. Social Networking, blogs, and discussions groups had the smallest percentage at 2.  Another similar study from MarketingSherpa outlined traffic sources for eCommerce Website visitors were derived from the following:

  • 24% direct to site
  • 24% paid search
  • 15% email house list
  • 14% SEO
  • 10% affiliates
  • 9% online advertising, portals
  • 4% email rented lists

The e-tailing group and PowerReviews findings of the 2010 Social Shopping Study Results indicated that online research remains central to consumer shopping behaviour, with 50% of respondents reporting that they conduct research online for at least half of the purchases made. 29% of consumers spend a few hours of research prior to making a purchase decision while 60% conduct research for a week or more.  When asked where consumers are doing research online, the study found that the majority (57%) of shoppers begin their online research with a search engine.

StatsCan most recent study found about half (51 %) of Canadians aged 16 - 34 purchased a product online in 2009, with men (42 %) more likely than women (37%) to have made an online purchase. The top 25% of online shoppers spent an average of $4,210 during 2009.  Travel services, entertainment products such as concert tickets, books and magazines, and clothing, jewellery and accessories, continued to be the most common types of online orders.

Where your business needs to be

As you can see, people rely on the Internet. Since the majority start off at a search engine or their favourite social media site, you need to get people's attention when they are conducting a search.  This is the point at which they are searching for related materials.  Your business needs to show up within the search engine's results pages.

This is where organic listings (improved by SEO) and SEM (paid ads) are utilized to showcase your website and garner attention by potential consumers.  Since Google has the lion share of search traffic (85%) in August 2010 reported by comScore qSearch, the results are clear that advertisers need to go where the people are.  Note that it's important to still conduct your own target market research to identify where your market is spending their time.   There is still a very large group of people who may not rely so much on the web for purchase decisions. No marketer would suggest spending your entire advertising budget on one medium.  Although TV holds the most consumption of time, most small to medium size businesses cannot afford the cost.  TV is also currently not a very engaging medium, meaning that content is being pushed to the viewer. Search Engine users are actively seeking information. The 23% represents a very interested and active consumer, where as TV viewers are much more passive, therefore we see the 40% there are not as valuable as the 23 on the Internet.  The Internet is the next largest consumption media and then becomes a more affordable option that can be reasonably budgeted for.

For most small to medium size business markets, the division of advertising mediums vs. the average cost to advertise may look like this.

Direct mail – approx. $5 / mailer
Newspapers/magazine – approx. $4,000 / ad
Radio - approx. $10,000 / week
Tradeshows/conferences – approx. $ 10,000 / show
TV - approximatly $35,000 / commercial
SEO/SEM – approx. $1000 / month

Note: costs may exclude any related creative, consulting or strategy work.

Options to be displayed in search results pages

There are many areas of a search results page where a website or its assets can be displayed.  I will focus on Google since it currently holds the majority of search traffic.

  1. Google Places - this is the area of the search results page that typically shows local business listings. It's a yellow pages-type listing with a map, business name and link to its Google Places listing.  This section is great for local searches for restaurants, dry-cleaners, etc.  There is no cost for adding your business to these listings. With the proper account setup, a business can be displayed on relevant searches within this area.
  2. Google Ads - these are the first 2-3 spots on the top of the page and the rectangles down the right hand side of the page.  Theses sections are titled Ads and display paid advertisements that are relevant to the searcher's keyphrases.   There are many factors that contribute to which ads are displayed - the top criteria includes proper campaign setup with relevant keyphrases, the ad's content and your budget allocation on a per click basis.
  3. Organic search results - this is the main body area of the search results page, which shows websites with a title and description listing.  These results are based on over 300 different factors that determine the relevancy and priority of ranking. The system that calculates this is Google's unique algorithm.  What SEO does is optimize those factors to prove to Google that your website is more relevant then the others so that they put your website higher than your competitors in the rankings.  An SEO company collaborating with a business will make necessary changes and contribute materials that promote website position improvements. Organic search results currently attract 70% of clicks on any given search results page - making SEO an affordable, and wide reaching marketing choice.
  4. Also Organic search results could contain Universal Search (or Blended search results). These results were introduced in 2007 and include images, videos, news, tweets, weather updates, stock quotes, dictionary definitions/answers and etc.

Every option to get displayed in search results is important. Utilizing SEO to get additional exposure is the cost effective way.

It is very clear that Internet Marketing and particularly SEO is a profitable and economical advertising medium for businesses today, namely because it displays a solution to a customers problem when they are looking for one.  It's also not as fully utilized as it can be; therefore the amount of work to get good results is not at its peak. As SEO becomes more popular, the effort to get good results and maintain the economical aspect of it will be much harder to achieve, but for the time being, businesses should seriously if not already be profiting from their Internet marketing initiatives. For all your online marketing and web design in Toronto needs, please contact us here.

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