What’s The Best Bang for the E-Buck?

By a three-to-one margin, marketers said optimizing a Web site for to attract search engines is a better bet for solid returns than paid search listings, according to a study by JupiterResearch.

The report noted that the cost models are different for these two activities. A paid search campaign usually involves a marketer paying for every click to a Web site that comes in through a key word entered into a search engine. As a result, investment costs constantly increase.

On the other hand, Web sites are usually optimized – designed to place highly in natural, or free, search results — for a flat fee. When these efforts pull in a Web surfer who makes a purchase, the ROI increases, as the investment cost remains static, according to the report, which was underwritten by search marketing firm iProspect.

There is some truth to this, but only some. Search engine optimization costs are not one-time expenses. As client bases and market needs change, and marketers offer new products, Web sites need to be re-optimized. And, of course, a savvy direct marketer will constantly test new site designs in order to ensure continued effectiveness.

Here’s another reason not to rush to switch over the marketing budget: Those saying site optimization performed better amounted to only 35% of marketers surveyed, compared with just 11% who said it didn’t do as well.

What about the rest? Nine percent said the two functions performed equally well, and the rest either haven’t compared these, don’t calculate ROI, or can’t distinguish the ROI for what they spend on paid search vs. what they spend on SEO.

Vendors have to do a better job of alerting clients that these analytics are available. Half of the marketers outsourcing their search engine optimization to a vendor don’t measure this activity’s return, according to the study.

Marketer who allow an outside firm to handle both of these activities are more likely to feel their natural search activities produced better returns. Among this group, 42% indicated optimization brought in stronger results than paid search.

The number of firms planning to use Web site optimization within the next year increased from those previously using it, while the number engaging in paid search was seen as dropping slightly during the same period.