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Which marketing channels generate the best ROI?

Link building to improve SEO

It depends on the industry, the type of business, and varies for different marketers. However, there's no doubt that some marketing channels generally give you more bang for your buck than others. So, to help you get the most from your budget, let's take a look at the data to see which marketing channels generate the best ROI.

When it comes to determining the most efficient marketing channel to focus your budget on, there's no one-size-fits-all solution. Television advertising may provide fantastic ROI for a mass market B2C organisation but the message of a highly specialist B2B is likely to be wasted on the vast majority of viewers.

Despite these variations, this research from Hubspot has identified some interesting trends about how organisations allocate their marketing budget and which channels generate the most leads.

Which marketing channels generate the most leads?

Lead generation is key to generating sales for many businesses.

Important purchase decisions aren't made there and then, they take time.

So, generating leads and then nurturing them through the buyer's journey is crucial to making sales.

Obviously this doesn't apply to e-commerce businesses, for example, where purchases tend to be more impulsive and the buyer's journey is much shorter. Another example of how there's no one-size-fits-all answer!

That said, it's clear that some channels are far more effective at generating leads.

The graph below shows the percentage of leads generated from different marketing channels, separated for B2B and B2C organisations:

which-marketing-channels-generate-the-best-roi-leads

Unsurprisingly, B2B companies generate far fewer leads from traditional advertising than B2C companies.

Digital channels are proving the most effective as SEO, email marketing, and social media generate the most leads for both B2B and B2C organisations.

How are marketers allocating their budgets?

But how are these organisations allocating their marketing budgets? It it in proportion to lead generation effectiveness?

which-marketing-channels-generate-the-best-roi-budget

Broadly, yes. B2B organisations spend less on traditional advertising than B2C organisations, for example, and the three most effective channels - SEO, email, and social media - are allocated a decent percentage of the total budget.

It's interesting to note that B2B organisations allocate 12% of their marketing budget to trade shows despite only generating 9% of leads. However, this is not necessarily a bad thing, as we'll see.

Return on investment (ROI)

While it may seem logical to allocate the greatest proportion of your budget toward the channels that generate the most leads, this won't necessarily improve overall ROI.

An email marketing campaign, for example, is likely to cost less than exhibiting at a trade show despite it generating more leads.

But diverting budget away from trade shows and creating more email marketing campaigns might not mean more leads. At some point, you'll see diminishing returns from investment in email marketing. After all, people generally don't like to be bombarded with thousands of emails from the same company!

And just because trade shows generate fewer leads than email marketing, this doesn't mean they don't provide positive ROI either.

Some organisations still almost exclusively use old-school channels to generate business. These organisations may well become important customers but if you don't connect with them at trade shows you may miss out on their business altogether.

To return to the original question, though, it seems likely that the three channels that generate the most leads - SEO, email, and social media - will generate the best ROI for the majority of organisations. Highly effective and relatively inexpensive, in almost all cases you're guaranteed to see positive ROI from these channels if used correctly.

Looking to boost your online marketing and improve ROI? At LexisClick we have years of experience helping all sorts of companies generate fantastic returns from SEO, email marketing and social media marketing. Get in touch on 01202 788333 or marketing@lexisclick.com to find out more.

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