The economy is cratering, your customers are spending less, and your marketing budget has been slashed. Yet you’re still on the hook to deliver qualified leads to your sales team. You may even be asked to deliver more qualified leads than before.

Yet the challenge is also an opportunity. Not all your competitors will survive the current downturn, and marketing effectively online now will set you up for success when the economy improves.

So what do you do? Now is the time to engage in online marketing, specifically search engine optimization and pay-per-click campaigns.

Let’s look at search engine optimization (SEO) first, because it’s highly effective. SEO means optimizing your site so that the major search engines such as Google, Yahoo and others will present your site high on the list of results when people search for your product or service.

You have to score high on search results or you won’t get leads from them. According to a study by Cornell University (as reported at www.seoresearcher.com), more than half of all clicks (56 percent) go to the first result on the list. Second place is worth only 13 percent.

It may be hard to crack the top two positions for your keywords, but it’s worth every effort to make the first page. SEO requires only a small investment and can pay significant ROI. For example, let’s assume “software protection” is your keyword phrase. Google claims just under 50,000 searchers use that term per month. If just 2 percent of those searchers visit your site, that’s an additional 990 visitors — and potential leads — per month. Not bad.

A quick calculation shows how profitable SEO can be. Turning those 990 visitors into leads will depend on having relevant, fresh content and a good call to action. But if you assume just 2 percent of the visitors get in touch with you, that’s 20 qualified leads per month. Use your company’s lead conversion rate to get your bottom-line ROI. For example, if you convert 10 percent of your qualified leads into sales, that means two new deals per month and 24 new deals per year — just by being optimized for that one search phrase.

Marketing Sherpa found that SEO netted the highest ROI of any technology marketing strategy for the nearly 4,000 firms surveyed. You get results by using SEO, for less cost than either traditional direct mail or even e-mail (which requires renting quality lists).

Tailoring the Web site’s content toward the right keywords — combined with having a site that downloads quickly, has fresh content and has intuitive navigation — will result in longer and more qualified visits by your target market.

Pay-per-click (PPC) is another good marketing option for these times. This is a system where the search engines display your ad when people use certain keywords in their searches. For each click on your ad, you pay the search engine a fee ranging from a few pennies to several dollars, depending on the market value for your particular keywords.

PPC offers many advantages. For one, it speeds up the sales cycles. PPC campaigns are easy to ramp up, since they don’t require long printing, mailing or publication lead times. You can launch a campaign within hours and see results the first day. PPC gets results, too. Combined with an optimized Web site, PPC typically delivers a 3 percent to 5 percent response rate. That’s equal to or better than most postal campaigns, cold calling and e-mail campaigns. Plus you can easily test different versions of your ad to get optimum results.

Finally, you can use a Web analytics tool on your landing page, tied to specific campaigns, to learn about your visitors: how long they stayed, what pages they visited, and whether they turned into qualified leads.

By integrating your landing page forms with your customer relationship management system, you ensure that all leads are followed up and accounted for. Closed-loop marketing becomes a reality in this case, enabling you to determine your cost-per-lead down to the penny.

The bottom line is, SEO and PPC work. They deliver high ROI for low cost, and they are extremely flexible, enabling marketers to react with agility to sales trends, ad performance and marketplace changes.

Unless you plan to quit marketing altogether, it makes sense to invest in online marketing during these tough economic times. And the sooner you do it, the better positioned you will be versus your competition.