• by Gavin O'Malley  @mp_gavin, September 7, 2007

Adding fuel to the controversy attached to the business of lead generation, another shareholder class action suit has been filed against ValueClick Media.

The latest complaint was filed Thursday by law firm Schiffrin Barroway Topaz & Kessler, LLP in the U.S. District Court for the Central District of California on behalf of all purchasers of securities of ValueClick. It alleges that the company's lead-generation practices violated the Securities Exchange Act of 1934 and Federal Trade Commission Guidelines.

Several other similar suits have already been filed, including one by Schatz Nobel Izard P.C. on Aug. 22 and another by Brower Piven P.C. on Aug. 20.

ValueClick appears to be taking this latest suit in stride, while its executives are unwilling to lay out their general defense due to several open cases.

"The only thing we can say right now is that these suits are ripe for a pretty vigorous defense," says John Ardis, ValueClick's vice president corporate strategy.

Still, ValueClick has seen its stock fall nearly 40% since May, in part due to its involvement in incentive-based lead generation. In May, ValueClick acknowledged that the FTC was conducting an inquiry into the company's lead-generation activities.

Marketers have begun questioning the legitimacy of many of the leads being generated--particularly those attained through incentives like marked-down iPods. In addition, the Federal Trade Commission has expressed its concern over potential privacy violations and false advertising claims.

Trading in customer leads has become big business in recent years. Marketers spent $1.3 billion on lead generation in 2006, more than double the $753 million spent in 2005, and 8% of all online ad dollars spent last year, according to the IAB and PricewaterhouseCoopers.

Last month, the Interactive Advertising Bureau introduced a list of best practices to help standardize the transfer and receipt of data between advertisers and lead-generation service providers. First on the IAB's list of priorities was security, imploring that all lead-generation data--the detailed information consumers give marketers online--should be transferred and received in an encrypted format. Secondly, the IAB stressed common format and setup, so all data is transferred in a common format through secure Web technologies.