Google's official stance is that they are "roughly equivalent" and recommends to do what is technically simpler to implement (source: https://www.youtube.com/watch?v=_MswMYk05tk).
With that said, I'd recommend a directory over a subdomain.
Doing this consolidates signals to a single domain, which should then theoretically build more authority for all pages off of that single domain. This consolidation of authority results in rank increases, which have been documented here: http://moz.com/community/q/moz-s-official-stance-on-subdomain-vs-subfolder-does-it-need-updating. A subdomain would split signals from the blog and the rest of the root domain content.
So while Google "says" they're roughly equivalent, SEOs have seen tangible evidence that sticking to a single domain can be beneficial.
If you're able to go with www.iconery.com/editorial/, I'd choose that.
Hope this helps!
I cannot answer for SEO. But from my very different vantage point, I believe that
in terms of brand visibility. Remember, human beings as well as search engines will see your URL. It's not just a functional mapping; it's also a form of advertising.
It doesn't matter like it used to.. or in a traditional SEO sense like you may be thinking. The most important thing now for SEO is to make sure that your blog is being promoted well and that it's an active part of your social media promotions along with your website.
That being said, if it's on topic then I would put it in a directory. This will increase the overall authority of your domain as long as you actively link from your blog posts to relevant pages throughout your website on a consistent basis.
I second Kyle's answer (just upvoted it) - and downvote any of the subdomain recommendations.
There is a running myth that subdomains hold the same SEO value as subdirectories... Unfortunately Google reps have confused a lot of people about this topic.
The subdomain option is only advisable if your site is an absolute beast. A good example of this is blog.HubSpot.com - their subdomain blog ranks really really well. However, they have a small army of marketers publishing, promoting, and sharing their content daily. They have also had several rounds of funding to fuel this authority they're gaining on the subdomain. Unless that sounds like you, avoid the subdomain strategy.
Compare that to the average blog, and it's a clear choice to use the directory over the subdomain, so you're not splitting authority across two domains. I don't care what Google has published, the data and the facts show time and time again that for 97%+ of blogs, subdirectories get much more SEO love than subdomains do. The reason is mechanical in nature. Think about it. Two domains equals twice the links necessary to get the same authority on one root domain. After optimizing hundreds of sites since 2005, I've found this to hold true with rare exception (the blogs that are beasts).
Follow respectable SEO's (like moz.com) who have case studies and data to show what's currently working on sites that are similar in size to yours. That's where you'll find the answer.
There has been a good amount of discussion about this, and a lot of studies show the subdirectory is the way to go, so go with that if possible.
The debate is summed up in total by this discussion between the Founder of Moz and Founder of HubSpot: https://inbound.org/blog/the-sub-domain-vs-sub-directory-seo-debate-explained-in-one-flow-chart
The golden summary: "Subdirectories are better for SEO. But don't let getting technical details right stop you from investing in blogging or content creation, because a blog on a subdomain is still better than no blog at all."