• by Laurie Sullivan , Staff Writer @lauriesullivan, September 24, 2010

Paid search consumes the largest portion of online lead generation budgets, accounting for 28% of spending this year, up from 22% in 2009. That's according to an online study from Econsultancy conducted in May and June. If you're to believe the results from the study, sponsored by online lead generation company Clash Media, then knowing budgets for online lead generation have begun to increase might lift your spirits in time for the holidays.

Most marketers admitted to increasing budgets from 53% in 2009 to 55% in 2010. The proportion of organizations that spend annually more than $150,000 on online lead generation increased from 21% in 2009 to 38% this year, according to the study.

Fewer companies say budgets decreased, 22% in 2009 vs. 27% in 2010. Publishers noted the highest increase. About 72% of publishers said budgets increased, 23% said it stayed the same, and 5% said decreased when asked if revenue from online lead generation changed.

It turns out online lead generation accounts for nearly half of business to consumer sales, but not enough marketers pay attention to the lead generation benefits gained through social media.

While marketer continues to tap into Facebook to create marketing campaigns, most marketers fail to take full advantage of social media, according to the study. While the proportion of companies using social media rose from 40% in 2009 to 66% this year, the report also shows only 15% use social media to nurture and generate sales on a long term basis, instead of using social media as a short-term sales tool.

Cost effectiveness remains the most widely perceived advantage from the range of business benefits associated with online lead generation. Sixty nine percent of respondents see online lead generation as a benefit.

The study also suggests:

1) After natural search campaigns, email marketing is the second most widely used online lead generation method, up from 74% last year to 83% in 2010.

2) Between 70% and 81% of companies generate leads online with the intention of converting them offline.

3) Only 21% of advertisers surveyed say they work with specialist online lead generation companies, suggesting that this is still an emerging sector which hasn't fully matured.