Why SEO & Email Are the 2 Greatest Marketing Budget Allocations
A recent report by Marketing Sherpa demonstrated that there are two marketing channels which statistically outperform the traditional powerhouses of telemarketing, direct mail, and even public relations. These two juggernauts of marketing are the twin online channels of SEO and email, which score 11% and 12% respectively in the allocation of all brand promotional budgets!
The impact of these channels is disproportionate to the proportion of company budget, since their efficiency rates are almost incalculably higher than the more conventional, older forms. This report provides ample ammunition to any SEO expert and email marketer in convincing clients that these twin channels are their best bang for the buck by far!
The astounding cost-effectiveness of email
The report demonstrates the literally astounding cost-effectiveness of email marketing. Even when the various expenditures involved in email content creation, data analytics, and mailing list development are amortized into the overall cost the amounts are dwarfed by the costs of channels such as:
- Direct mail which has to factor skyrocketing printing and postage costs into the equation
- Telemarketing which incurs enormous labor costs as well as overheads, even when outsourced to Third World call centers
- Public Relations which is extremely lugubrious and brings in ever-shrinking results due to the disproportionate demand for press by millions of actual and wannabe publicists.
Completely disproportionate ROI
Even though companies may be spending 50% more on email marketing than they do for direct mail does not equate to the proportional reach of each medium. The Return On Investment (ROI) quoted for email marketing by the Direct Marketing Association is nearly 44 to 1.
For each dollar invested in email marketing, there is an average return of $44, which is four times greater than the similar return for direct mail which stands at close to $11. Therefore if we calculate based on the Marketing Sherpa report figures that 12% of all marketing budgets are being dedicated to email marketing and 8% to direct mail, the math tells the story:
Email: 12% of budget x ROI of 44
Direct Mail: 8% of budget x ROI of 11
So if we assume a million dollar budget for a hypothetical brand, the figures are:
Email Profit: $120,000 x 44 = $5,280,000
Direct Mail Profit: $80,000 x 11 = $880,000
Efficiency per dollar:
Direct Mail: 1
We therefore find that each dollar invested in email marketing produces six times the profit of a dollar invested in direct mail! By all means a ROI of $11 is nothing to turn away, but if you have a limited marketing budget would you rather invest in a channel which provides a specific profit or another which provides six times as much? The answer seems easy to discern, but it does not help to explain why so many brands are still stubbornly allocating advertising budgets to channels which are as comparatively ineffective as direct mail!
SEO advantages of email content
Another advantage of email marketing is the feasibility of its content being repurposed for a wide variety of applications, many of which have significant SEO value. The rewriting or summarization of email newsletter content can make for superlative and keyword-rich blog or article content, and it readily lends itself to being turned into audience-attracting blurbs: longer ones for Facebook, LinkedIn & Google+, and shorter ones for Twitter.
Takeaway: SEO and email marketing form a synergy so powerful which has commanded almost a quarter of all promotional budgets and the amounts are rising year on year. There is no substitute for success, and the primary reason why so many brands spend so much money on SEO and email marketing is… because it works!