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Leads for Less with Social Media

Social media, blogs and search engine optimization more cost-effective for lead gen

February 25, 2010

Pull marketing tactics such as search, blog and social media generate cheaper leads than more traditional outbound efforts, according to data from inbound online marketing platform HubSpot.

The “2010 State of Inbound Marketing” report indicates that spending on lead generation is 60% less among companies that devote at least one-half of their budget to inbound marketing, compared with companies spending at least one-half of lead generation dollars on outbound tactics.

The average cost per lead from inbound marketing was also significantly less.

Average Cost per Lead for Inbound vs. Outbound Marketing According to Companies in North America, January 2010

In both 2009 and 2010, companies in North America tended to rate all the inbound tactics studied as below average in cost per lead. Respondents rated direct mail most cost-effective among outbound strategies. Still, only 37% said it generated leads for less than average.

Cost per Lead Rating for Inbound Marketing Among Companies in North America, by Tactic, 2009 & 2010 (% of respondents)

The gap in cost-effectiveness is leading to a gap in spending, the report said. Inbound tactics are seeing a slight increase in share of lead generation budgets, while outbound tactics are decreasing. Usage of mixed tactics such as e-mail—which can be used for both push and pull marketing—is also on the rise. And businesses rated every inbound channel more important than any outbound channel for their lead generation efforts.

HubSpot also noted that more than two-fifths of companies using various social media marketing channels had acquired a customer from those channels.

Companies in North America that Have Acquired a Customer from a Social Media Site or Blog, by Customer Focus, January 2010 (% of respondents in each group)

Unsurprisingly, for business-to-business firms, LinkedIn was most effective for customer acquisition. Business-to-consumer companies did better on each of the other sites, with the best results coming from Facebook, where nearly seven in 10 had found a new customer.

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Check out today’s other article, “Can Online Metrics Work?


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