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.