Companies are continuing to shift lead generation budgets online, but spending less on paid search to get consumer leads, according to research published this week by Econsultancy and Clash-Media.

Two thirds of company respondents (65%) say that their use of online lead generation (OLG) has increased in the last year, compared to only 11% who say that it has decreased. The average proportion of lead generation budget which is spent online has increased to 61% from 53% in 2008.

But there has been a sharp 12% drop in the proportion of companies using paid search for generating consumer leads, from 71% (in both 2008 and 2007) to 59% in 2009.

Natural search (SEO) and email marketing (in-house lists) are still the most widely used methods for lead generation and have held steady at 76% and 74% respectively.

The third annual Online Lead Generation (B2C) Report, published by Econsultancy in association with lead generation specialist Clash-Media, is based on an online survey of more than 600 respondents from the UK, US, Europe and beyond.

The report also found:

• Despite more widespread use, fewer than half of companies (47%) say they are effectively exploiting online lead generation as a way of growing their B2C business. Respondents in mainland Europe (53%) are mostly likely to be using OLG effectively.

• There is a continued trend towards decreased use of offline channels for generating consumer leads. The proportion of companies using newspapers and magazines to generate leads has decreased from 65% in 2008 to 54%.

• The biggest decrease is for direct mail where there has been a 12% drop from 50% of businesses in 2008 to only 38% of businesses. Radio has fallen from 21% in 2008 to just 12% of companies.

• Surprisingly, despite the recession, there are still more companies who, in the last year, have increased their overall marketing budget rather than decreased it (53% compared to 27%).

Linus Gregoriadis, Research Director at Econsultancy, said: “Despite online marketing becoming more competitive, many companies find digital channels to be much more cost-effective for lead generation than traditional media.

"During the recession, there has been more focus on natural search and email marketing because these channels are often regarded as more cost-effective.”

The most widely perceived benefit of online lead generation is the ability to increase the prospect list and customer base, seen as a benefit by 73% of company respondents.

The majority of client-side respondents also see cost effectiveness (72%) and the ability to target (60%) as benefits. For supply-side respondents, the most widely perceived benefit is its cost-effectiveness.

“It's great news for the industry that the majority of marketers are seeing increased budgets – and very few are seeing a reduction – and that they can see the benefits of Online Lead Generation," commented Simon Wajcenberg, CEO of Clash-Media.

“What did surprise us about the results is how few people – 35 per cent – saw the benefits of performance-based campaigns. This leads us to believe that not enough providers are delivering transparent campaigns, which inhibits their ability to be performance-based.”

The full Econsultancy / Clash-Media Online Lead Generation Report (B2C) 2009 is available for download here:
http://econsultancy.com/reports/online-lead-generation-report

Journalists and bloggers can email or call Linus Gregoriadis for a complimentary copy of the report and / or further information.

Email: linusgregoriadis AT econsultancy.com
Tel: + 44 (0) 207 269 1465

About Econsultancy

Econsultancy is the leading source of independent advice and insight on digital marketing and e-commerce. Our reports, events, online resources and training programmes help a community of over 80,000 registered marketers make better decisions, build business cases, find the best suppliers, look smart in meetings and accelerate their careers.

Join Econsultancy today to learn what’s happening in digital marketing – and what works.

Call us to find out more on +44 (0)20 7269 1450 or contact us online.

http://econsultancy.com

About Clash-Media

Clash-Media launched in 2006 and now delivers around five million fully opted-in sales leads every month for customers around the globe, including Whiskas, Toyota, Cheapflights and AXA.

Clash-Media currently has offices in London, New York, Copenhagen, Munich and Paris, with plans to expand into Spain and Italy, followed by Asia-Pacific.

Additional information is available at www.clash-media.com

Published on: 3:14PM on 28th July 2009