Search still most efficient by far at acquiring customers, study says

At an average cost per acquisition of $8.50, Internet search was shown to be more than twice as efficient as the next-best marketing channel in a study of five channels by Piper Jaffray & Co.

The study, “The New eCommerce Decade: The Age of Micro Targeting,” which was released earlier this month, compared the customer acquisition costs of search, Yellow Pages, online display ads, e-mail and direct mail.

Yellow Pages came in as the second-most efficient at $20 per customer acquisition, followed by online display ads, $50; e-mail, $60; and direct mail, $70.

In other matters related to search, the study found that consumers are becoming more likely to use Internet search to find products and services, rather than going to online marketplaces. And with the growth of local search, the current number of 700,000 online advertisers could reach 2-4 million over the next five years.

Source: Internet Retailer, October 26, 2006

This study reinforces our view that for many small and medium size businesses, Search Engine Marketing delivers the best bang for the buck and should be the starting point of any marketing strategy. Rule #1 is to get found by those people already looking to buy what you're selling. And the place they're looking today is the online search engines.