While a lot of media professionals will lump together search engine optimization budgets with advertising budgets, the question of whether search engine optimization and advertising are the same thing is not as clear cut as it might seem.
The ROI of small business advertising is often measured in weeks or months. Did our latest promotion bring people into the store to buy products? Traffic tends to increase as long as the ads are running and then sharply fall off afterwards. For small businesses with cash-strapped budgets, this type of advertising often has an allure of quickly injecting the invested cash back into the business in increased sales.
Search engine optimization is fundamentally different.
As a long-term advertising opportunity, results never materialize overnight. As your site grows in rankings, it begins earning more and more clicks from potential customers, and since Google is the place most customers turn first to find information about your business, the sales increase becomes exponential as your site moves into the top three, top two, and top ranking for important search terms.
But unlike advertising, which sees short-term spikes, search engine results usually appear as a hockey stick, trailing flat for several months and then driving sales upward at increasing rates.
The result is actually a significant net positive over other forms of advertising. Assuming you’re using quality strategies, search engine optimization will likely continue to bring more and more traffic to your storefront. And long after your latest promotional advertisement has been forgotten, your search engine presence will remain.
Let’s consider two case studies.
Our first business, ABC Automotive, runs three promotions a year and buys $30,000 per year worth of traditional advertising, including TV, radio, and out of home. The company earns an average ROI of about 10% on advertising. After four years, ABC Automotive will have spent $120,000 and earned $132,000.
Our second business, XYZ Automotive, invests $30,000 in search engine optimization. After the first year, they have earned top ratings for a variety of popular keywords in their city, and drive hordes of potential customers to their storefront. After the second year, they reduce their investment in search engine optimization and focus on maintaining their presence, rather than expanding. They spend $60,000 over the same four years and drive additional new customers to the front door.
The important thing to note is that search engine optimization and promotional advertising aren’t mutually exclusive, but they also aren’t the same thing. If ABC Automotive expected their search engine investment to drive sales for a specific event, their results would be less than stellar. On the other hand, by investing half their marketing budget in promotional ads and the other half of their funds in search engine optimization, they could continue to achieve the sales spike during their promotional period while leveraging the long-term benefits of search engines. XYZ Automotive, on the other hand, would see flat sales for the first year and have to explain to sales staff and to their owners and boards why the marketing budget is being invested with such a low ROI.
Search engine optimization has a real ROI benefit outside of driving additional traffic: it can significantly reduce advertising spends in the future. A business that has a strong digital presence through search, social, email, and paid advertising can spend less on promotional periods thanks to the ability to reach out to potential customers during promotions via free channels like social media and email marketing. Many businesses operate entirely within the digital landscape successfully and drive enough business that expensive traditional advertising seems like an inefficient way to boost business.
Is search engine optimization advertising?
Yes and no. It helps drive traffic, but it doesn’t deliver returns in the short term like traditional advertising. It’s best to cordon off an advertising budget specifically for search engine optimization while maintaining the rest of your advertising spends as a long-term investment. If you treat search engine optimization returns like you do your traditional advertising returns, you’ll show a lower overall ROI than you actually have. SEO is a marathon, not a sprint.
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