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.