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Can paid search and online lead generation co-exist in the same marketing plan, or do advertisers buying leads just end up cannibalising their own own search efforts?

As online lead generation starts to establish itself as a separate discipline in online marketing and an increasing number of advertisers start to see the benefits of paying for leads on a CPL basis, marketers will have to start making some decisions to allocate sufficient budgets to their online lead generation campaigns.

For many lead products, paid search is still one of the most important ways to generate premium leads. This raises a few interesting issues for advertisers running paid search campaigns at the same time as buying in third party leads on a CPL basis. Can the two really exist together in the same marketing plan?

The best way to answer this question is to go back to basics and look at what a search engine like Google really offers. For many consumers, Google is like the ultimate local shopping street where you can compare the goods and services of various different suppliers in the comfort of your own home.

After doing some research, consumers can then make a purchasing decision. As an example consider a consumer looking for a new life insurance policy. They go to Google and search for something like “life insurance”.

Life insurance keywords are very expensive, up to £10 or more for very generic terms and phrases. Looking at the screenshot, there are a number of big brands paying a lot of money to be at the top of Google for these life insurance keywords. There is Aviva, Legal &General and the AA to name a few. There are also appearances from Sainsbury’s and Tesco’s.

Now back to the consumer searching for a new life insurance policy. Many of these will click first on the brands they know, do a bit of research and then click away. This is an expensive way for brands to promote their products and services.

Effectively, they are often just subsidising the efforts of other advertisers as the consumer is in “comparison” mode and many will then go on to click on suppliers such as Protected.co.uk and Quote-Life.co.uk where they can leave their information to be contacted about the products and services. Companies such as these are just third party lead suppliers generating leads to sell to insurance intermediaries or direct to insurers.

Not only do these sites pick up clicks that the advertiser’s own paid search efforts fail to convert, they are also much better at converting the initial click into a form conversion i.e. a consumer leaving their information giving their express consent to be contacted about the product or service.

Ultimately this is what all advertisers want: consumers that want to be sold to, and this is what lead generation is about. It takes advertisers beyond the click or the impression and serves up a genuine prospect.

Search campaigns are often set up to optimise the click and not the conversion which means that valuable prospects never make it to their call center or fulfilment team. By purchasing leads, brands are not cannibalising their own search spend but sweeping up incremental conversions into the sales funnel and taking advantage of an expertise that goes beyond increasing their website traffic.

Justin Rees

Published 9 December, 2009 by Justin Rees

Justin Rees is founder of Talking Customers and Cofounder of Currently.

15 more posts from this author

Comments (3)



But if we take your argument to the extreme here, and say that all sellers of life insurance products were to stop CPC advertising on google and that leads to that only the lead generators do CPC. Wouldn't that just shift the cost of the expensive CPC words to the lead generators, who then in turn would have to up the prices on their leads to cover that cost, which means that the seller of the life insurance policy still ends up having to pay about the same price as right now?

Becuase a few of the CPC clicks gotta convert already, and when they do, that means a customer that cost less to the insurance seller to pick up than if he had bought a lead.

almost 7 years ago

Justin Rees

Justin Rees, Cofounder at Talking Customers


Thanks for your comments. Just thought I'd reply to some of the issues you raised.

Although I would never advocate life insurance companies stopping their paid search campaigns, if this did happen it might actually bring lead costs down.

If you make the assumption that pure third party lead suppliers bidding on generic keywords will have better click through rates and form conversions than life insurance brands then as they would be competing with fewer companies on their paid search then CPCs and therefore CPLs should fall.

Life insurance companies could then buy these leads for less!


almost 7 years ago

Peter Bell

Peter Bell, Managing Director at Fuse Lead Marketing

Very good points Justin and worth noting that these same lead aggregators use co-reg, email & affiliate marketing lead gen. to drive people to their own sites again competing for lead gen media with the end user advertisers.

It just goes to show that lead generation is surely a discipline in it's own right.  PPC cannot be said to be pure lead generation as long as payment is CPC rather than CPL.

A lead must therefore be expressed as a person who has given consent to be contacted and is interested in buying not a anonymous click from an IP address.

I hear Google is trialing mortgage lead aggregration in the US which if rolled-out would make digital life even more interesting...

almost 7 years ago

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