March 7, 2023
Wondering if Google Ads is the best channel for generating quality, profitable leads? In this post, we dive deep into the data of the best channels for driving leads.
Asking whether Google Ads is the best for lead generation is like asking how long a piece of string is. It depends on so many factors!
In this article, we’ll dive deep into the factors influencing lead generation. We’ll also compare Google Ads to other marketing channels to help you determine which approach will deliver the results you’re after.
It’s also worth noting that different marketing channels work better for different industries. The context of your business and the success of your marketing campaigns will also impact the volume and quality of leads you generate through any channel.
So let’s take a look at each channel and determine whether Google Ads is the best among them for delivering consistent, reliable and profitable leads.
In our experience running multiple digital marketing campaigns across various industries, we’ve observed that Google Ads can deliver unparalleled performance for many businesses that need a fast method of generating relevant leads.
The number of leads generated increases in proportion to the budget you invest in ads. However, over time, you can generate even more leads on a lower budget by using data to strategically update your ad campaigns.
It’s difficult to provide a reliable benchmark that applies to all situations and for all websites. However, we’ve pulled some sample data from live campaigns we monitor in our platform to illustrate the power of Google Ads.
Total Spend = $1,865,540.89
Total Conversions = 40,660
Total Click Through = 513,747
Average cost per lead or transaction = $235[/content_aside]
In general, we’ve observed eCommerce conversion rates are significantly lower compared to non-eCommerce campaigns. For instance, in our sample data, the average conversion rate for eCommerce Google Ads campaigns was 6.58% while for non-eCommerce it sits at 10.02%.
However, it’s interesting to note that eCommerce campaigns generate more click throughs per dollar spent and have a significantly lower cost per conversion.
Total Spend = $256,488
Total Conversions = 9,932
Total Click Through = 103,348
Average cost per lead or transaction = $61[/content_aside]
Total Spend = $1,609,053
Total Conversions = 30,728
Total Click Through = 410,399
Average cost per lead or transaction = $265
Note: If we exclude the competitive B2B outliers (with extraordinarily high conversion costs) the average reduces to $109.28.
If you’re after quick leads, Google Ads deliver!
Strategic Google Ads campaigns we’ve implemented have allowed us to successfully launch new brands and begin delivering leads almost instantly. No matter the context, if people are searching for a service or product, then Google Ads has the power to skyrocket new brands and brands in competitive industries to new heights.
Take a look at the data for this automotive brand we helped launch in early 2021 using Google Ads.
While this company had a simple 5-page website, it was clear to the owners that a rebrand and investment in their digital strategy could help skyrocket their success in an untapped market.
We launched their Google Ads campaign straight away while our design team worked on the rebrand and website build in the background.
Through the power of ads alone, we were able to:
From the data above, it’s clear that Google Ads can generate leads quickly and reliably even if you don’t have the most amazing website. In the case study, we were able to generate leads in the second month of running ads while also increasing each sale's transaction value.
It’s clear that Google Ads is a powerful lead generation tool. That much cannot be ignored. Now, let’s compare it to other marketing channels to assess whether Google Ads is the best lead generation channel.
Search engine optimisation (SEO) is another search-based marketing channel that relies on the unpaid areas of search results to deliver results.
With Google Ads, you have to buy your placements. With SEO, you earn them.
Perhaps the biggest drawback of SEO is the time it takes to start generating leads. Earning top-position rankings takes time, and there are no shortcuts, especially for new or emerging brands that have little brand authority to draw from.
Many businesses we work with often wonder if it’s even worth doing SEO when it takes so long to deliver leads. So let’s dive into some sample data from the SEO campaigns we monitor in our platform to help us answer this question.
Total Spend = $1,014,562
Total Conversions = 53,099
Total Click Through = 2,362,444
Average cost per lead or transaction = $74[/content_aside]
In our findings, SEO will always outperform Google Ads if given enough time for results to start compounding. Check out our in-depth guide on Google Ads vs SEO where we share stats across multiple business verticals and website types.
For lead gen in particular, here’s how SEO compares to Google Ads using $1 million as the baseline spend. These figures are based on the same time period our sample data has been taken from, between July 2022 and Jan 2023.
[table][thead][tr][th][/th][th]SEO[/th][th]Google Ads[/th][/tr][/thead][tbody][tr][td]Total Spend[/td][td]$1,000,000[/td][td]$1,000,000[/td][/tr][tr][td]Total Conversions[/td][td]52,336[/td][td]21,795[/td][/tr][tr][td]Total Clicks[/td][td]2,328,536[/td][td]275,388[/td][/tr][tr][td]Average Cost Per Lead[/td][td]$74[/td][td]$235[/td][/tr][/tbody][/table]
Over the same time span, and for the same budget, it is clear SEO performs better than Google Ads. SEO has delivered:
But, how does it fare in the first few months of a campaign when compared to ads?
SEO can generate some leads fairly quickly but not as quickly as ads can. Using the same automotive client as an example, here is the initial performance of the SEO campaign.
And here is the overall performance since early 2021.
SEO has a cumulative, compounding effect compared with Google Ads. However, there is also a long lead time before SEO really kicks into gear and starts delivering a return on investment (ROI).
On average, it can take six to nine months before an SEO campaign breaks even (and perhaps longer in very competitive markets). However, after the first year, things really start to ramp up and results compound in ways no other marketing channel can deliver.
Naturally, given the overwhelming data supporting the performance of each channel, it makes sense that Google Ads are better for delivering leads quickly and reliably. SEO takes time until results compound but also has the potential to surpass Google Ads in ways you cannot even predict!
But it’s also worth noting that once SEO starts to kick into gear, the amount of leads delivered by Google Ads doesn’t slow down. There’s no push-pull mechanism nor is it like a lead gen currency where the more leads you receive from SEO, the fewer you’ll get from ads. Each channel delivers independently of the other, even when you reach exponential success.
For this reason, we recommend using both search ads and SEO in tandem with each other for maximum lead generation potential from search engines.
For a few reasons, it is very challenging to determine whether social media delivers better lead generation potential than search-based marketing.
Firstly, there are attribution blind spots that make it challenging to connect a social campaign to a definitive return on investment, especially in the long term. While some attribution is certainly possible, especially for social media advertising, there are too many gaps to make a direct comparison.
The other challenge is that social media is amazing at delivering results for intangible goals such as boosting brand presence and recognition, but these goals are difficult to measure. Social posts and ads are able to leverage virality in a way search engine marketing cannot.
For example, eCommerce stores that successfully leverage various social channels also reap rewards when it comes to search-based marketing in the form of brand authority. These screenshots indicate the SEO performance of eCommerce brands that have successfully used social media to boost their brand authority.
Notice how the number of branded keywords is significantly lower than the unbranded ones, but the volume of traffic the branded phrases deliver is disproportionately large in comparison?
That’s due to the power of leveraging social media.
While we can measure the impact of brand-building activities through the SEO data, it’s very difficult to get the full picture by relying on data from social platforms alone.
In any case, we can’t discount social media's impact on developing a brand’s presence and authority in the digital landscape and the flow-on effect that has. However, for the goal of improving lead generation, search-based marketing will deliver more tangible and reliable results faster, even for new and unknown brands with no social presence.
When deciding which marketing channels to use for lead generation, there are many factors that can impact your results.
Social media works brilliantly for some types of businesses but will not make a dent for others. For instance, consumer brands and eCommerce stores experience more success with social media than B2B or local service-based businesses might.
The context of your business and the way people make buying decisions in your industry will determine the best platforms for lead generation.
Even so, multiple businesses within the same industry can also experience wildly different results on the same platforms based on how they compare to the competition. For new brands that are just starting out, it may take longer to generate consistent, profitable leads than it will for established brands.
Businesses that rely on offline marketing can also see boons when it comes to online marketing. For example, well-known local franchises may not need to develop a strong brand presence online to still experience success for unbranded searches. Through offline advertising, they have likely already earned a decent amount of mindshare and trust among locals.
The success of any online marketing activity really comes down to your business, where you’re placed in the market and the types of leads you’re chasing.
Understanding the types of leads that will bring the most value to your business is also critical. You may not need as many leads to earn a decent ROI if you sell a product or service that lends itself to repeat sales. If your business relies on B2B sales or volume transactions, your approach and the channel you rely on will need to be different if you want to generate the types of leads you’re seeking.
For example, a client in the tourism industry will require fewer leads to earn a return on their investment since many customers will likely buy more holiday packages in future.
To truly understand whether Google Ads is the right (and best) option for lead generation for your business you need to determine if it will be able to deliver the ROI level you’re seeking. Google Ads can reliably deliver profitable leads for unbranded product and service searches.
Regardless of the strength of your brand, or even how long you’ve been operating your business, you can rely on Google Ads to deliver fast leads if its capabilities as a channel align with your business model.
In particular, Google Ads can be very profitable for your business if:
Google Ads can work effectively independently of any other marketing channel making it one of the best digital marketing strategies to begin with.
Book a free strategy session with one of our Senior Digital Advisors today if you’d like assistance with setting up your Google Ad campaigns, or even with understanding what types of leads will have the biggest impact on your business.
Book a free 90-minute strategy session that gives you a clear plan for business growth.
Despina is a Senior SEO Consultant with 8+ years of experience growing B2B, e-commerce, SaaS, and national brands.