Online lead generation is becoming more important but most companies need to improve the way they use this type of marketing, according to research by E-consultancy and Clash-Media published today.

The proportion of company respondents who believe that their organisations are effectively exploiting online lead generation to grow their business-to-consumer (B2C) customer base has decreased from 44% in 2007 to 41% this year.

This is despite the fact that the vast majority of both company respondents (82%) and agency respondents (85%) are expecting online lead generation to be more important to their own or their clients’ organisations over the next 12 months

Online lead generation is about using the internet as a way of getting contact information for qualified prospects. These leads can be generated by a number of methods including search engine marketing (both natural and paid search), affiliate marketing, email and the use of online aggregators.

The vast majority of those surveyed for the Online Lead Generation (B2C) Report 2008 see online lead generation as a growth area (94%), significantly up from 82% last year.

The research, which follows a similar study in 2007, shows that company marketers from North America believe their organisations to be more adept at online lead generation than their European counterparts. More than half of company respondents from the US or Canada say they are exploiting online lead generation effectively, compared to 37% for UK marketers and 38% for the rest of Europe.

Linus Gregoriadis, head of research at E-consultancy, said: “The market for online lead generation in the UK is not as well developed as the US but it is catching up fast. However, the research shows that many companies, especially in the UK and the rest of Europe, are still not making the most of this type of marketing activity.”

Two thirds of company marketers believe that investment in natural search (SEO) is “very good value for money”, making it the most cost-effective channel for generating B2C leads.

Gregoriadis added: “Natural search, also known as search engine optimisation, is still regarded by digital marketers as the lead generation method which is most effective and also the best value for money. However, the important thing for marketers is to be open to a range of options which can help to build their customer base.”

In-house email marketing lists are also regarded by more than half of respondents (52%) as being very good value for money. This method compares favourably to rented email lists which only 16% perceive as offering very good value for money.

The research also found that the average conversion rate for leads acquired from online aggregators is 13%, compared to 11% for the overall average conversion rate of leads generated online.

Luke Pursey, UK Managing Director, Clash-Media, said: “The increased use of online marketing methods shows how the market is changing. Organisations have lessened their use of marketing methods such as postal, telephone and radio, in favour of online methods.”

He added: “The most encouraging difference from last year’s report is that now marketers are finally beginning to recognise Proactive Online Lead Generation as its own area of online marketing and not as a sub-division of affiliate marketing. The disconnect now is not getting people to understand what Online Lead Generation is, but helping them to make the most of it and maximise its potential as an extremely effective online marketing tool.”

Some 266 company respondents and 195 agencies took part in E-consultancy’s online survey during May 2008.

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Other key findings

Natural search (79% of respondents), in-house email marketing lists (75%) and paid search (71%) are still the three most commonly used online methods for lead generation. The use of in-house email marketing lists is the biggest climber, from 71% last year to 75% this year.

Compared to 2007, paid search is getting a bigger proportion of online lead generation budgets even though natural search is perceived to be better value for money, according to company marketers. Paid search now gets a third of this budget (33%) compared to 28% in 2007. Meanwhile, SEO (search engine optimisation) now only gets 15% of the budget compared to 18% last year.

Companies are now investing more in their in-house email marketing. The average proportion of budget devoted to this has increased from 10% to 15%.

Media contacts:

Linus Gregoriadis, Head of Research, E-consultancy

(e: linus AT t: 0207 681 4051 / 07956 564713)

About E-consultancy, an online publisher of best practice internet marketing reports, research and how-to guides, was named Publisher of the Year at the 2006 AOP Awards. Since moving to a paid content model, it has since amassed thousands of paying subscribers, 70,000 registered users and 145,000+ unique user sessions per month. Subscribers pay from £195 per year to access exclusive and practical content.

About Clash-Media (Research Sponsor)

Clash-Media, the sponsor of this research, is a leading performance-based digital marketing company providing advertisers with innovative new methods of generating consumer leads.

Clash-Media, based in London, launched in the UK in 2006, with further expansion into the US and Scandinavia in 2007. Clash-Media has already set up a German office in 2008 and has plans to develop a presence in France later this year.

Clash-Media’s powerful lead generation network connects advertisers to consumers producing millions of qualified leads each month, capturing audiences to an advertiser’s exact specifications.

Clash-Media now works with partners that include MSN, Tiscali and MySpace, generating leads for global brands including Volkswagen, MBNA and T-Mobile.

More information about Clash-Media is available at:

Published on: 12:00AM on 12th June 2008