How Many Leads Can You Expect From Each Marketing Channel?

Apr 12, 2022 | All, Digital Ads, Digital Marketing, Marketing, SEO, Social Media

What is the cost of digital marketing?

This is the first question that would come to your mind if you were thinking about digital marketing. Truth be told, there is no simple or straightforward answer to this. There are many factors that must be weighed before arriving at any number. Your industry, audience profiling, the scope of marketing, and the timeframe you are considering for marketing are just some of the factors that determine the overall cost of digital marketing. 

The second question would be about the amount YOU must invest to get the best results? Now, that is probably a more appropriate question considering how elusive the answers to the first one can be. When it comes to allocating funds for a digital marketing campaign, you must understand the importance of leads since they eventually convert to sales.

Generating leads is the key to a successful marketing campaign. So, when it comes to leads, naturally a question of which channels can generate the maximum leads at the least possible cost arises. The cost per lead (CPL) will depend entirely on your industry, market, and your target audience. For instance, if you run an online book store a $50 CPL may sound unfeasible but it would be a bargain for a law firm.  

Understanding Cost Per Lead (CPL)       

It is thus important for you to make sense of CPL if you want to know what it costs to run your digital marketing campaign. For example, let us say for the sake of this conversation that you have a monthly budget of $1000 for digital marketing. Should you spend it on one lead or target to reach 100+ leads for the same cost? Won’t more leads be better for your business? But can all leads convert to sales? What is the closing rate to consider? These are just the things to know before venturing forward.

Understand Closing Rate         

Once we talk about CPL, it is also important that we discuss the closing rate too.  Let’s take the help of an example to understand the closing rate. If you have five leads, at least one should convert into a paying customer meaning that you get a closing rate of 20%. That’s the standard average expected in any industry. Every business though aspires to close more leads. If your closing rate improves, it will bring more sales for your business.  

CPL and closing rate are two basic concepts that you must understand. But there is more to know. Most importantly, how many lead to expect from each marketing channel.

In this article, we shall focus on lead conversion to sales and what are factors to consider. Let’s get started.

Scope of Leads from Traditional Marketing      

Traditional marketing was the go-to form of advertising before the age of the Internet. There are many options available in this form of marketing right from billboards, print ads, mailers, radio, flyers, TV ads, etc. But things have vastly changed in the last many years so much so that traditional mediums no longer command the same respect in advertising.

According to data compiled by the Linchpin Team, the average cost per lead of traditional advertising mediums (such as print, radio, and TV) can be $619. At the low end, the cost per lead would be $38 while at the high end it would be $1200.

If these numbers are to be tried in real life say with $1000 at your disposal, what would be the returns or leads you can expect? According to an article by the Integrated Marketing Association, it is likely to take you three months to just see one sale. This means that in an entire year, you would be seeing only four sales.

Traditional marketing once had a wide reach but today things are not quite the same. If you think you have the time and money at your disposal to wait long for returns, then investing ONLY in traditional mediums may be worth it. However, before you invest, ensure that your target audience accesses these mediums, and your advertising will help turn them into leads and consequently bring in sales.

Scope of Leads from Video Marketing   

The average cost per lead of video marketing is $174. The minimum you are likely to spend is $59 while on the higher end you could be spending $288 for a single lead. If the closing rate is 20% in all these cases and you have a marketing budget of $1000, the average lead generated would be 5.7, 16.9, and 3.5 respectively.

This essentially means that the prospects of video marketing working in favor are higher than traditional marketing. You could be spending $174 for one lead with a closing rate of 20%. However, the question of whether your target audience can easily find the videos remains. You may have to invest in additional marketing mediums to popularize your videos through social media, email marketing, and other marketing channels.

Video marketing can be used in many ways. It is up to you to decide what form best suits your business needs. Does an explainer video work for your business, or should you invest in an educational video? What about promotional videos or even vlogs? Study the pros and cons of each format of video before you invest in any form.

Scope of Leads from Social Media Marketing    

Unless you are living under a rock, you would know that social media is one of the most powerful mediums of marketing today. Its greatest advantage lies in its cost ‚Äď you can start without investing anything at all. It is also less challenging to get started with. Investing in social media platforms such as Facebook, TikTok, Twitter, Instagram or LinkedIn can give you high returns both in terms of leads and sales.

The average cost per lead is likely to be $58 with a closing rate of 20%. If your budget is $1000, you get 17.2 leads. And you are likely to see three sales using social media marketing in such a case. However, it takes time to generate leads and see conversions using social media marketing. You may have to wait at least 6 to 12 months before you see any meaningful conversions. It takes time to build your brand’s credibility on social media. Even for engaging with your audience, you must give it time.

For certain types of businesses, social media works as a great platform. If your business is visual and as such you run a restaurant, art gallery, or café, social media is likely to work great for you. Social media is also great if you want to look beyond leads and sales and want to concentrate on audience engagement. However, for other types of businesses, social media marketing may not be the most feasible option especially since you must wait 6-12 months to enjoy any returns.   

Scope of Leads from Email Marketing  

It is a misleading assumption that email marketing is no longer effective. Many believe so because their inboxes are regularly spammed with unwanted business mails. But the reality is entirely different. People open emails and read their content with quite some interest. According to a report, for every dollar you spend on email marketing, you get 36 times in return.

The average cost per lead in email marketing is $53. This means that if you spend $1000, you are likely to see three sales. Unlike social media marketing, you don’t have to wait almost a year to reap the benefits. If you have a great contact list that includes your potential clients, target audience, and everyone you should reach out to, you can make any email campaign successful.

Scope of Leads from PPC Marketing     

You must have seen PPC ads whenever you search for something on Google or any other search engine. These are the search results that are advertised or paid for by businesses to search engines. Short for pay per click marketing, in this form, you must pay every time a user clicks on the link. So, if your link is clicked a thousand times, you pay a thousand times for it. Sounds too much, does it? The good news is that the cost of each click is mostly less than a dollar. However, the cost of PPC ads primarily depends on your marketing, industry, and target audience.   

If you invest $1000 in PPC, you will get four sales. Notice how this has the best cost per lead among what we mentioned so far. Generating leads can be extremely quick (quite like email marketing). But to fully optimize your PPC ads, it can take you anything between 3 and 9 months to show results. So, though the above average says that you are likely to enjoy four sales, this isn’t going to happen soon. PPC marketing is a great way to quickly drive people to your website. If this is what your immediate goal is, go for PPC marketing.

Scope of Leads from SEO Marketing     

Search engine optimization or SEO should be your go-to method to ensure favorable rankings on search engines. To rank at the top of search engines such as Google, Yahoo, or Bing, you must invest in SEO. But what are the returns you can expect upon investing in SEO? Let’s find out.

The average cost per lead for SEO marketing is $31 while the highest cost per lead is $47. The lowest CPL is $14. This means that if you are investing $1000 in SEO, the average lead generation will be 32.3 while the incoming sales will be 6.5. This basically means that for every $1000 invested, you are likely to enjoy six sales. However, just like social media marketing, you will have to wait at least 6 to 12 months before you see any result. Moreover, the success of your SEO campaign will depend on your market and audience segmentation.

If you want to generate leads immediately, SEO will not work for you. In such a case, PPC or email marketing will bring in more immediate leads. But if you are ready to wait for a little and work hard in the meantime, you will enjoy a high return on investments. Understand your goals first before investing in SEO.

Should You Invest in Different Marketing Channels at The Same Time?

As the saying goes, ‚Äúdon’t put all your eggs in one basket‚ÄĚ, it is best not to invest in just one marketing channel at a time. Investing in multiple channels at the same time is the wisest thing to do. In fact, almost all digital marketing experts will suggest you do so.

It is important to understand that all marketing channels do not require the same amount of budget to get started. For example, if you have a $1000 budget for monthly spending on marketing, you do not need to allocate $200 each into five channels. Instead, you must understand the requirement of each channel, the kind of returns they are likely to offer and allocate accordingly. You could spend $500 for PPC, $300 for ad management, and the rest on PPC marketing. But all this depends on your market and audience proliferation. For a visual business, investing in social media marketing should take priority along with SEO and PPC advertising.

The best course to take is to hire the services of a digital marketing agency that can guide you towards better spending for higher returns. They understand the fundamentals of the game and can help you run tailored campaigns to meet your goals.

Partnering with The Right Digital Marketing Firm         

You can successfully launch your digital marketing campaign when you have the right partner managing things. You would agree that an expert can steer your business towards leads, sales, traffic, and visibility. Unless you understand the rigmarole of digital marketing, you cannot succeed.

Cyrusson Inc. is a boutique digital marketing agency that has years of experience in navigating small and medium-sized businesses towards digital relevancy and popularity. We believe in continuously updating our skills with the changing requirements of the industry. It is our never-say-die attitude that has helped us pave the way towards being a sustained agency that has registered more successes than failures.

Partner with us to know how we can help design your digital marketing campaigns. We have a tried-and-test formula with which we approach every new client. We research, study, collect data and analyze before even taking the first step. Unless we have a strong sense of your business and understand your requirements, we will not move ahead.

Ours is a close and connected team that works in tandem with one another. Our PPC experts will always support the SEO guys to do better and so on. If you think you deserve such a company for your digital marketing endeavor, get in touch with us today. We can surely work out the best campaign for your business. 

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