Let’s Talk About “Signaling Theory” in the Context of SEO/GEO: A Hamsterdam Marketing Lesson

By Ethan Lazuk

Welcome to another edition of Hamsterdam Marketing! 🐹

This is a project where we examine marketing topics to learn about their fundamental concepts and apply them to the context of SEO/GEO.

This time, we’ll be looking at signaling theory.

When they’re buying something, consumers rarely have perfect information about it. Thus, they interpret signals that help them assess whether a product or service is trustworthy or worth purchasing. In today’s AI search environment, those signals could include the recommendations of an AI assistant. Thus, an AI assistant can become an intermediary between a brand’s signals and the consumer’s interpretation of those signals.

What Is Signaling Theory?

Signaling theory explains how a business communicates information about its quality, credibility, and/or value to consumers who can’t directly evaluate those characteristics before making a purchase. The concept originated in economics but has since become an established framework in marketing.

For example, consider a luxury hotel, where a customer might evaluate the following characteristics before booking:

• Guarantees: Flexible cancellation policies can reduce perceived risk.
• Pricing: A higher price can suggest exclusivity or premium service.
• Brand reputation: An established name creates expectations about quality.
• Third-party recognition: Awards and independent reviews can provide credibility.
• Visual presentation: Photography and design influence perceived quality.

Note how these characteristics individually might mean little but taken together can form a consumer’s interpretation of the overall brand, and also how the characteristics align with the types of signals SEO/GEO professionals might try to establish through search environments, like search engines or AI assistants, for a brand’s online presence.

That said, not all signals are created equal. Signals can be especially informative when they are costly or difficult for a lower-quality provider to imitate. For example, claims of “exceptional service” are easy to imitate, whereas a “money-back guarantee” incurs a potential expense that wouldn’t be possible for all businesses.

The SEO/GEO Connection of Signaling Theory

The same characteristics that may make up signaling theory for a brand can also relate to SEO/GEO strategies, namely brand reputation and third-party recognition. But the connection between signaling theory and SEO/GEO goes further than that.

If consumers rely on signals to evaluate a brand, we must consider what happens when their first interaction with that brand occurs through a search engine or AI-generated answer. Thus, websites, independent reviews, editorial mentions, case studies, and consistent brand information — core components of many SEO/GEO strategies — can all influence people’s perceptions of a business.

Practical Takeaways

For this section, we’ll focus on how we as SEO/GEO professionals can apply signaling theory to help a brand communicate its quality, establish credibility, and influence consumers’ purchasing decisions.

Step 1: Identify which signals matter most to your target audience

Not every consumer will interpret signals the same way. A person researching a luxury architect may care about project photography and client testimonials, whereas someone choosing a healthcare provider might care about credentials, patient reviews, and professional experience.

The objective is to understand what your audience considers evidence of quality, then prioritize those signals throughout your SEO/GEO and general marketing strategy.

Step 2: Focus on verifiable evidence over promotional claims

Any business can claim to be an industry leader, but that statement may carry less weight than independent recognition, documented results, or credible customer testimonials.

Thus, the goal is to incorporate verifiable evidence of quality and credibility, such as case studies, certifications, awards, customer reviews, and measurable results, into website content and other marketing materials.

Step 3: Build consistent signals across digital touchpoints

The online environment provides many ways for customers to interact with a brand’s information, such as through its website, Google Business Profile, social media, third-party directories, or AI-generated answers. Any inconsistent information or conflicting representations of that business could create uncertainty. To avoid that, maintain consistent brand positioning, business information, and messaging across channels.

Step 4: Invest in third-party validation

Independent sources can provide additional evidence of credibility beyond a brand’s website. Such sources, when relevant to a user’s prompt, can also influence AI visibility through citations or mentions. Rather than buying inauthentic mentions or coverage, invest in tactics that earn legitimate industry recognition, relevant editorial coverage, expert citations, and authentic customer reviews, such as digital PR efforts backed by original data and research.

Step 5: Create useful content that fills in information gaps

A business will naturally know more about its products or services than its customers will. That creates information asymmetry. One goal with web content is thus is to narrow that gap with transparent information about pricing, processes, qualifications, common problems and solutions, and real work examples. This will help buyers evaluate characteristics they otherwise couldn’t observe.

Final takeaway

A signal of quality to a consumer isn’t automatically a ranking signal for Google or a factor that causes an AI assistant to recommend a brand, but there is overlap between what signaling theory represents and what SEO/GEO strategies aim to present.

In short, SEO/GEO goes beyond making a brand discoverable to also include helping potential customers find the information and evidence they need to properly evaluate that brand.

See you next time!

I hope you’ve found this discussion around signaling theory helpful for your SEO/GEO strategy.

Stay tuned for a new Hamsterdam Marketing lesson soon.

And if you want a hand with your SEO/GEO strategy, get in touch with me. I’m an independent consultant based in New York City.

Until next time, enjoy the vibes:

Thanks for reading. Happy optimizing!