A recent survey by American Express and SEMPO revealed that small and mid-sized businesses (SMB’s) are investing more in social media than in search engine optimization. Considering the challenges in measuring social media ROI, I was ambivalent about this finding. I mean on one hand I am not surprised businesses are really interested in social media. After all, it is what everyone seems to be entranced by. On the other hand, search engine optimization is such a powerful tool to actually generating leads and it can be more easily measured.

There is little question that SMB’s value word-of-mouth as the most effective way to acquire new customers. Social media certainly can result in greater brand and top-of-mind-awareness and it is pretty cost effective if the personnel involved are highly skilled and productive at it. Interestingly, search engine optimization was considered fourth on the list. After that, advertising in the more traditional sense is taking a lesser and lesser position on the list of what is important to new customer acquisition.

On the contrary, a different survey sponsored by MerchantCircle found that local small businesses were more likely to say search engine optimization was a more effective channel than social media, at 40.2% vs. 36.7%. Because some social media platforms like Facebook have become part of the very fabric of our society, people know how to use them and the learning curve is relatively easy. On the other hand, the costs, technical challenges and mystique of search engine optimization may be discouraging factors to more SMB’s using this marketing approach.

I wonder if a survey was conducted with SMB’s who are doing both social media marketing and search engine optimization, whether these business owners would say social media or search engine optimization was better at actually generating leads. Our experience clearly indicates at this point in time that search engine optimization is far more effective at actual lead generation. After all, what better situation can you have then a qualified customer going to Google, typing in a search phrase to find a product or service provider and virtually asking who out there has what I am looking for? I mean, think about it.

Now, this is not to say social media marketing should be ignored in favor of search engine optimization. Considering the social media trends we are seeing, both are critically important and should be considered for serious investment. The nuances of your target market, their shopping and buying patterns and the strength of your competition are all factors to be considered to determine how much of each is right for you.