This is one of the most frequently asked questions I get from clients. It isn't that one is better than the other. Both have their purpose. However, the purpose for each is far different and you should not get article marketing confused with press releases.
Of course good copywriting is essential to both a press release and article marketing. And both are optimized to contain your keywords for seo purposes. But the relationship between article marketing and press releases ends there.
Article Marketing is the distribution of well-written, informative articles to article directories in the hopes that they will get syndicated by or reprinted on other websites and blogs. Article marketing helps with link popularity for this reason.
Article Marketing helps with branding you as an expert in your field and can drive traffic directly to your website if readers like the article.
Press Releases are written to announce a newsworthy event. They are distributed to news websites, news agencies, news blogs, newsletters, etc. They are not the same as an article.
Most press releases I see submitted aren't newsworthy at all however. People are using press release distribution to send out articles. They have article marketing and press releases all mixed up.
I read press releases that sound like sales letters all the time. Pure self-promotion is not a press release at all. It's a sales letter sent out through a press release distribution center.
People who see these know the difference. News agencies who could be printing or redistributing your press release to a wider audience can see the difference at a glance.
If you do not know how to write news, you do not know how to write a press release. Unfortunately, many of the people on the web who offer to write press releases for money don't really know how to write press releases. They know you don't know the difference between a press release and an article or sales letter either, so they get away with charging money for the service.
Go to any press release website. read the press releases. You'll see more than 50% are self-promotion or just articles. If it doesn't read like something you would read in a newspaper, it isn't a press release.
You can do a press release in the first person or from the company perspective, but you have to be announcing something that is newsworthy. Something new happening. Something that people will want to know about. A merger, an acquisition, a partnership, a new website launched, (Can only be done once!), a new blog launched, are all things that can be newsworthy and must be presented as a news item, not as a "Come Visit MY Website Please!" article.
Press releases do even better if written as a reporter would write about your announcement. The Reporter, (press release writer), can even interview you and others at your company for quotes to use in the press release.
People are hungry for news. A press release should only be distributed if there is news to announce. Yes you want to optimize your press release for the search engines but seo is not the number one purpose for distributing a press release.
Announcing something newsworthy is the first reason. You only optimize it because it is being distributed on the web and that is the secondary purpose for the press release, not the first.