New Research Reports Build Case For Online As Qualified Lead Gen Vehicle

Two recent reports show that online media is becoming dominant for lead generation strategies and ROI measures. A Hearst Electronics Group survey of BtoB marketers indicated that the migration of communications budgets from traditional media to online “has accelerated to the point where nearly half of all spending, 47%, is spent on online marketing techniques today.” Compare that 47% to the widely reported 8% percent of budgets for most consumer marketers.

That report was supported by a surprisingly candid look at BtoB marketing by McKinsey Consulting in the McKinsey Quarterly. McKinsey director David Court’s “The Downturn’s New Rules For Marketers” puts forth some radical ideas for BtoB marketers, including a complete reconsideration of advertising vehicles. Reach and cost per qualified lead, according to Court, are the proper targets for BtoB marketers. Email, banners, rich media vehicles, and web site marketing are the most efficient vehicles. On the outside, and inefficient, are outdoor advertising, TV, and sports sponsorships, the report stated.

“Most marketing plans therefore try to meet their objectives cost-effectively by using a mix of traditional and new vehicles, with the latter typically accounting for 10% to 15% of spending,” Court wrote. “A reprioritization of this kind requires a better understanding of the effectiveness of different forms of advertising than many marketers have today. These marketers, who assume the reach and cost of a vehicle serve as a proxy for its effectiveness, ignore the vehicle’s quality—that is, its ability to influence customers. Quality is easiest to measure in direct businesses, which can precisely determine the return on investments in outbound catalogs or e-mails. But there are ways to estimate the quality even of harder-to-measure vehicles—such as television, product placements, and sponsorships—and to prioritize them accordingly.”

Court presented evidence of the wide discrepancy between vehicles for reach and return by showing how a range of activities rate on the cost per qualified reach. He urged BtoB marketers to analyze their own activities to show this pattern, because it is not consistent from company to company.

The Hearst report directly addressed the use of online ads for lead gen. “Part of the reason marketers are so willing to devote such a large portion of their budgets to online may be tied report to lead quality,” it states. The single best source of leads, the report found, is their web site, at 24%, followed closely by search engines at 19%. Online and trade shows, at 15%, are the most important sources of quality leads. "In this environment, many budget choices in 2009 will be based on what's 'nice to have' versus what we 'have to have.' Programs that are proven to generate the highest quality leads, and that are easiest to track to a lead or sales conversion, will end up as the winners," the Hearst report concluded.