Marketing Case Study: Search Engine Marketing vs. Radio for Local Advertising
I have just completed a three-month study testing the effectiveness of SEO and Google Adwords against radio advertising in generating quote requests for a consumer insurance product. The test was contained to a market area of one city and surrounding areas.
The local radio budget was $13,000/month, and the campaign ran for approximately three months on three stations selected by the company’s ad agency as being representative of the target demographic. To allow the radio a fair chance to establish frequency, I began tracking the search marketing comparison at the start of the second month of radio advertising and am reporting on exactly two months of radio results data ($26,000 invested over the two months – not counting the cost of producing the ad).
The Adwords budget for the same local market increased over the period of the study from approximately $400/month to approximately $750/month. And the total SEO budget was approximately $2,000/month.
The SEO began approximately two months prior to the commencement of the study and was geared to a two state market area. I have presented only the results produced within the local market area being studied. Reach your own conclusions about how to apportion the SEO budget to this market area. I made a liberal estimate in calculating cost-per-lead (CPL) and assigned 50% of the SEO budget ($1,000/month).
I must disclose that SEO was managed by pros from Virginia SEO firm, Big Oak. In my estimation, they are one of the top SEO firms in the country, so don’t expect to match their results on your own.
To be counted a quote request, a prospect had to complete a fairly onerous form online providing enough personal information to generate an insurance quote. This information included social security number, driver’s license number, birth date, vehicle ID number (VIN) among other information.
Quote requests were assigned to radio based on self reporting from prospects on the quote request form. Those generated by Adwords were tracked using Google Analytics. And quote requests originating from SEO were calculated by applying an adjusted site conversion rate (removing Adwords traffic and conversions) to natural search traffic.
I call this a 3-month study because I included statistics for an additional month after radio stopped to further validate the conclusions.
Here are the statistics on the number of quote requests generated by source. (Keep in mind these results relate only to one local market area.):
Radio Results
Month 1: 62
Month 2: 46
Month 3: 0 (stopped radio after two months)
Average CPL: $240.74
Adwords Results
Month 1: 37
Month 2: 47
Month 3: 62
Average CPL: $17.98
SEO Results
Month 1: 29
Month 2: 44
Month 3: 60
Average CPL: $22.55
These are certainly dramatic results. Search engine marketing (SEO and Adwords) outperformed radio by more than 10x in terms of marketing efficiency and together, doubled the lead volume produced by radio. And as you can see, the SEO results are climbing. I would expect that it will take a year before SEO begins to level off, so in that regard, the best is yet to come.
What happened to the site’s traffic and gross conversion rate (total visitors to total quote requests) in the month following the end of radio was particularly interesting. Traffic went down by approximately 16%, and the conversion rate went up by roughly 21%. This indicates to me that the radio drove a fair amount of traffic, but for whatever reason, it was low quality traffic.
One other meaningful side-note – the company elected to place advertising on the radio stations’ web sites. Total click-throughs from those ads during the three-month life of the campaign were 108. The conversion rate was 1.85% (a whopping two quote requests).
Despite plenty of sales claims to the contrary, with almost no exceptions, I consider incremental marketing dollars invested in placing ads on either a radio or television station’s web site to be wasted. If you have ever had success with the online advertising component sold as a part of a television, radio, or even yellow pages ad, I would love to hear about it.
Google Adwords, local advertising, local marketing, pay per click, radio advertising, SEO
October 2nd, 2007 at 1:31 pm
Hi, Tom.
Thanks for the kinds words and the link to our site. It is a pleasure doing business with your client and we always like hearing Big Oak is good for ROI.
October 2nd, 2007 at 8:04 pm
Thanks Tom for sharing the results. One question I have is: what is the URL of the site that was promoted? Was it easy to remember?
Because there is a medium gap and people will have to remember the URL after listening to the radio ad, its essential to have a catchy domain name.
October 3rd, 2007 at 11:28 am
This further goes to illustrate that point that “focused” marketing will triumph over “mass” marketing any day of the week. SEO and AdWords helps consumers connect with a business they are *LOOKING* for, while radio blasts anybody that happens to be listening. Very good article though!
October 14th, 2007 at 9:41 pm
[…] Tom Blue wrote an interesting post today on Marketing Case Study: Search Engine Marketing vs. Radio for Local …Here’s a quick excerptSearch engine marketing (SEO and Adwords) outperformed radio by more than 10x in terms of marketing efficiency and together, doubled the lead volume produced by radio. And as you can see, the SEO results are climbing. … […]
November 3rd, 2007 at 5:17 pm
To make the statement that “focused” marketing will triumph over “mass” marketing any day of the week - Well, that kind of assumption based on your findings is wrong. Everything begins with understanding a client’s key marketing challenges and most of those are addressed, not in the context of a short term, next day productive objective. There has to be a balance between branding and next day productivity. For the insurance client who needs a form filled out for the more immediate conversion is one thing. Local, regional and national businesses that survive the long term must also perform in Brand recall and preference. So, as an example, I hear XYZ Automotive Group commercials almost every day on Radio in Cincinnati but I’m not in the consideration set. Two months pass and I enter the purchasing mode. What dealers would I consider for a new Hyundai? I contact the dealer that has best communicated their core attributes as they relate to my expectations. No, your rip on Radio shows your inexperience. and limited learnings in understanding not only media mix but messaging and how selected platforms facilitate these crucial short and longer term goals. If you were correct, then no advertiser needs to look past the internet platform. No one entity has the solid footing in local search. Not Google, Yahoo, the IYP’s or pure plays. I suggest you read some Seth Godin.
February 19th, 2008 at 4:50 am
[…] The Power of Online Advertising There have been plenty of studies done to show the power of on-line marketing. I have written about this a couple of times on my blog LocalBizBits.Yes numbers are good, but it isn’t until you experience it yourself or know someone who has, can you come to understand or appreciate the power the Internet has for your small business.Last year, I found this very informative article: Marketing Case Study: Search Engine Marketing vs. Radio for Local Advertising by Tom Blue. Tom conducted a 3 month study comparing SEO and Google Adwords (Pay per click ads) vs regular radio advertising for a local small business. Head over to his blog to read all of the specifics but the results were very,very interesting.The radio ad budget was $13,000/moThe adwords budget was $400-$700/mo and the SEO budget was $2000/mo The Radio ads average cost per lead was $240 while the adwords and SEO cost per leads were $17.98 and $22.55 respectively.Not hard to do the math here! Now with any study, these results only represent one business in one particular market. In general though, with on-line marketing you have the ability to truly target your market. You set the keywords, the location(s), length, and budget of your ads. So you can start small and work your way up.Right now most folks are ressearching product/service information on-line and then going off-line to purchase. Take advantage of that today! […]
May 13th, 2008 at 2:57 pm
[…] Radio vs Internet Marketing It is time to put your money were your mouth is. Tom Blue wrote an interesting article comparing the results of advertising on the radio verses Internet Marketing the results were pretty amazing […]
May 13th, 2008 at 3:03 pm
I was sitting in a coffee shop when I overheard two Radio sales people discussing their campaigns. So after introducing myself and what I do I then googled Radio verses Internet Marketing to see the facts. This article is amazing. Thanks for sharing!
December 25th, 2008 at 2:40 pm
Tom,
I googled you related to SEM and insurance marketing. I would be interested to know if your client revealed the actual cost per sale. I am putting together a proposal for SEM for someone seeking to sell Term Life Insurance via the net. I have estimated the cpl, but do not have a handle on the conversion of lead to sale. Any metrics or do you know of some place where empirical data is available.
Thank you.
E Mohr
February 12th, 2009 at 2:56 am
Enoyed your post and bookmarked you for future reading.. Thinking of adding some of your content to my website ZestforMarketing
April 1st, 2009 at 4:34 pm
Every time i come here I am not dissapointed, nice post
April 16th, 2009 at 9:53 am
Great article! As I work int he SEO/SEM industry, it no surprise to me that the Internet marketing performed the best. Thankfully, people are FINALLY catching on to the power of internet advertising!