Industry Survey: PPC Is Losing Ability To Generate Leads

2012-surveySEO continues to be the top lead generating channel among U.S. digital marketers, while PPC’s effectiveness as a lead gen channel is dropping significantly. B2B marketers are even saying that social media marketing is now more effective than PPC as a lead gen channel.

That’s according to the 2nd annual State of Digital Marketing survey from WebMarketing123, an online agency based in California.

As they did a year ago, Webmarketing123 surveyed more than 500 U.S. marketers, 65 percent of whom self-report as B2B marketers. Reps from companies including GE, Sony, Cisco, Olympus, Bose and FedEx took part. Survey respondents were fairly well divided in company size, with 32 percent coming from businesses with 1,000 or more employees and 23 percent from companies with 50 or fewer employees.

Most Effective Lead Generation Channels

This year, 59 percent of B2B marketers and 49 percent of B2C marketers credit SEO with having the biggest impact on lead generation — in both cases, those numbers are significantly higher than both PPC and social media. As the image below shows, B2B marketers are now saying that social media (21 percent) has a bigger impact on lead generation than PPC (20 percent).

2012-lead-gen

Both B2B and B2C marketers are giving SEO more credit this year for lead gen than a year ago and less credit to PPC. We took Webmarketing123′s results from both years and made our own charts showing how marketers’ opinions about lead gen channel effectiveness have changed.

On the B2B side, PPC saw a five-point drop from last year (25 percent down to 20 percent) and, on the B2C side, it was an eight-point drop (34 percent to 26 percent).

b2b-lead-gen

b2c-lead-gen

Measuring SEO = A Challenge

Though most marketers say SEO is their top lead generation channel, they also say that measuring the true ROI of organic search remains a challenge. About half of those surveyed are relying on what Webmarketing123 labels “basic” measurements — those related to traffic and rankings — and only about a third are measuring SEO by how many leads or sales it generates.

seo-measurement

Not shown above: More than 30 percent say their biggest frustration with SEO is “difficulty in measuring results” and about 70 percent say they’re not able to accurately attribute leads or sales to organic search. That latter number is actually contradictory to the data above about SEO being the most effective lead gen channel — are the survey respondents really sure about that if they’re struggling to attribute leads and sales to organic search? Or, would SEO be credited as even more effective if more respondents were able to accurately track it?

You can get the full report from Webmarketing123′s website (contact information required to download) and draw your own conclusions if you’re so inclined.

Also see Survey: Facebook Best For B2C Sales & Leads; LinkedIn For B2B on our sister-site Marketing Land, which looks more at the lead and sales effectiveness of various social media channels, as found by the report.

Related Topics: Channel: Search Marketing | Features: Analysis | Search Marketing: General | SEM Industry: General | SEM Industry: Stats | Stats: General | Top News

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About The Author: is Editor-In-Chief of Search Engine Land. His news career includes time spent in TV, radio, and print journalism. His web career continues to include a small number of SEO and social media consulting clients, as well as regular speaking engagements at marketing events around the U.S. He recently launched a site dedicated to Google Glass called Glass Almanac and also blogs at Small Business Search Marketing. Matt can be found on Twitter at @MattMcGee and/or on Google Plus. You can read Matt's disclosures on his personal blog.

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  • Hillz

    Don’t worry…Google is working on some new organic algos to change that. We all know they don’t like seeing positive SEO reports like this :)

  • Justin Sous

    I was literally thinking the same thing! We need to keep these reports to ourselves so google doesn’t come out with the next Panda update on the richter scale… :)

    Matt I think those numbers fluctuate greatly depending on industry and metro area, but good to know that SEO numbers are on the rise. Unfortunately (or fortunately?), Google will be forcing marketers and businesses to use PPC for a long time.

  • http://twitter.com/VinnyLaBarbera Vinny La Barbera

    Thanks for sharing this data.

    Although I agree that SEO is still the leading lead gen source for us and many of our clients, I don’t agree that Social Media has surpassed PPC – at least not yet. We are still seeing PPC to deliver higher conversion rates / more conversions, then any Social Media sources. The cost per lead is still lower as well.
    This said, I can definitely see Social Media being a bigger source for many more companies today than ever before. And I can even see it surpassing PPC for us within the next 12-18 months. For this to happen though I think Facebook and Twitter need to figure out their ongoing issues with spam and fake accounts that skew these numbers.

  • http://www.facebook.com/stephenpitts Stephen Pitts

    The most important thing that has been left out is the size of the shares… In my experience, B2B marketers are becoming more active in the digital landscape because traditional channels are not producing the same results as they have historically.
    I look at this as a positive thing for SEO adoption from B2B, but not that PPC has become any less valuable. Without the full picture of the growth from year to year, the assumption that paid marketing is less effective is without a foundation.

  • Matt McGee

    It’s a good question, Justin. Without knowing the exact wording of the questions and the answer choices, etc., it’s hard to fit that 70 percent figure into the survey results. What did they specifically mean when they said they can’t accurately attribute sales to SEO?

  • Don DeVange

    I suspect the decline in PPC performance may be more related to the surge of new blood in the industry that isn’t yet experienced and/or hasn’t learned to run a successful campaign.

  • Casse Langford

    The same report that tells us PPC is supposedly “losing effectiveness” also tells us that 90% of marketers plan to spend the SAME or MORE on PPC in 2013. Are they throwing money at
    “something that’s dying” because they don’t know what else to do, or do they
    legitimately “needing to spend more for reason X Y Z” …?

    Then, we’re told only an average 16.3% of those interviewed claim to be
    “highly satisfied” with their results in any effort (agencies having the higher satisfaction rates in this bit).

    What about the other 83-odd percent? How satisfied are they? Why aren’t they more satisfied?

    How much does their dissatisfaction skew their outlook on other points?

    This report reveals what I can only describe as a lot of “blind-doing”by under-educated folks and a sad lack of communication on the what, the why, and the how of any part of a campaign.

    …which, to me, is much more alarming than any ill-observed “loss of effectiveness” suggested by the very group who seems to lack the qualification to make that call in the first place.

  • http://www.datadrivenseo.com/ Data Driven SEO

    This makes sense but if you’re running all 3 at the same time, it definitely is more difficult to track. Obviously PPC is the easiest to track because you can send traffic to any landing page with tracking parameters (phone number, online form, etc). I think overall PPC effectiveness is getting tougher because of competition, which means increased CPC’s with the same conversion rates. SEO does always seem to provide the best ROI, especially for businesses with a local presence. Properly optimizing your Places account(s) is probably the single most profitable online marketing technique a local business could do. We’ve done lots of testing comparing the ROI of SEO, PPC, and Social Media with national sites, and we’ve seen pretty similar results as stated above. Going after long-tail traffic is the best way of maximizing your ROI for both PPC and SEO, because obviously conversion rates tend to be much higher on the “ready to act” keywords. My guess is that people who are saying PPC is losing it’s effectiveness are dealing with industries that have a recent influx of competition and higher CPC’s.

  • http://twitter.com/InsideVault InsideVault

    Seems fair to question that if these companies are “losing effectiveness”, why would they be increasing their Adspend yearly.

    While no one can question the effectiveness of SEO, seems to me like we will be incurring changes over a short period of time. Google´s ongoing war with SEO, and its effect on PPC is yet to be seen, but we can get to one conclusion: With the right optimization, PPC is much more effective in terms of volume and cost per acquisition.

    As for Social Media surpassing PPC… I dont believe it will happen any time soon. PPC delivers, without a doubt, higher conversion rates than any social media source.

  • Avid SEO

    It’s not anything, with more agencies and advertisers dipping their feet into PPC the spots are getting competitive and saturated, if you don’t know what you’re doing (80% of the advertisers) you’ll probably lose money.

    Despite the fact that big G decided to declare a war on SEO it is still the ruler of the dome when it comes to ROI, it is known that half of the big agencies are using a specific seo reseller to produce their rankings and roi, too bad this seo reseller doesn’t offer PPC packages yet (hint hint)

  • http://twitter.com/phil_od Phil O’Doherty

    I’m reading this with caution because I’m not completely sold on the validity and methodology of the study. I do agree however, that PPC is getting more difficult in some cases but it is still possible to see great results. Social media is fantastic for some industries but in others it is next to impossible to see a quantifiable return.

  • Gary Bisha

    minifreelance , if used properly can be an effective tool for lead generation. It is the cheapest possible way of lead generation.

  • http://www.flowsimple.com Flow Simple

    I agree. Given the number of successful campaigns we run for our clients and the complexity of PPC marketing, I am very skeptical about the veracity of this survey.

  • http://www.delivra.com/ Cody Sharp

    I find this report incredibly hard to believe. PPC now accounts for nearly 65-75% of the above the fold search results in Google (on most search terms). There is simply no way it does not fair better and due to the people surveyed (who likely have built their careers around SEO), it is obvious the reason for the SEO bias – they want to keep their jobs. Using social media to drive leads to convert to sales doesn’t work for B2B in my experience either. Next time, ask a Sales Director what type of leads actually close; a long tail word that gets some traffic and some sign-up conversions or an on-point PPC word that is pricey but shows intent for purchase.

  • Crocuss

    It’s
    not anything, with more agencies and advertisers dipping their feet
    into PPC the spots are getting competitive and saturated, if you don’t
    know what you’re doing (80% of the advertisers) you’ll probably lose
    money.

    Despite the fact that big G decided to declare a war on SEO it is
    still the ruler of the dome when it comes to ROI, it is known that half
    of the big agencies are using a specific seo reseller to produce their
    rankings and roi, too bad this seo reseller doesn’t offer PPC packages
    yet. Nice post!

  • http://twitter.com/solvater Arafath Hashmi

    I too agree with this, PPC is really good when you know how to do it!.

  • http://twitter.com/nickwilsdon Nick Wilsdon

    Even more worryingly, they seem to be able to confidently attribute sales to social, to the detriment of PPC, while admitting they struggle to measure SEO – a relatively easy task. Clearly there are some serious issues with the methodology and questions behind this work. Maybe it should more accurately be titled, ‘What marketing channel reps think is hot right now, based on gut feeling’. Without questioning those who understand the data, or how to measure performance, it’s no more than an opinion piece.

  • Ron

    I agree, SEO is more of a technical on-page set of rules, and the rest is link building. PPC is still producing leads for me, and while I’ve seen more competition, there’s always a way to leverage that. Social produces very little leads for my sites, I use it more as a branding tool more than a lead gen tool – its just not there yet and may never be because of why people use it.

  • http://twitter.com/kayak360 kayak360

    SEO is our #1 lead generation activity.

  • http://twitter.com/LanguageWire LanguageWire

    Is it really about choosing? PPC is great in many ways cause it is easy to track and feeds the website with valuable information that can be used for SEO in the long run. That Social Media is not as effective for lead gen is probably due to the fact that most companies especially in more complex sales use it for promoting content in the early stage of the buying cycle. But in the end, all channels support eachother and the ones that can mix them using the right amount of focus accordingly will be the most succesful in terms of lead gen

  • http://www.facebook.com/odelia.preger Odelia Preger

    75% of these companies have been out-sourcing their PPC activities. Without seeing what actually happens to those PPC leads, its no wonder that their quality has been low. Its critical to align Marketing and Sales in order to follow up on the deals that the leads eventually close. Only then will B2B’s understand how successful PPC could be in their online marketing mix!

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