• by Chris Kovach , January 18, 2007

While I was walking around the Ad:Tech tradeshow late last year, overhearing snippets of conversations on the show floor, it occurred to me that any attendees who were new to our industry would likely leave the show with the impression that hundreds of exhibitors have mastered the art of online lead generation. It's not unlike the recent hedge fund proliferation. Only a few years ago, hedge funds were but a tiny niche catering solely to the ultra-wealthy. Now, every other investment firm seems to be a "hedge fund," and it's noteworthy, if not predictable, that we are seeing some dubious behavior and headline-grabbing collapses in that sector.

The current stampede to online lead generation is understandable, too, given that lead-gen and related activities like co-registration are the fastest growing segment of all Internet advertising spending, according to the Internet Advertising Bureau. Nothing else even comes close. For now, let's focus on co-registration, which can be a golden goose for many Web sites and advertisers who have discovered how to mine Web site user registrations with transparent, opt-in, consumer offers that convert into solid sales leads and yield predictable ancillary revenue for Web site publishers.

Even though co-registration has been around for years, there's still a considerable lack of understanding in some quarters as to what constitutes best practices for Web sites, advertisers and consumers. This is one of the reasons why my company and others formed the Online Lead Generation Association about a year ago, an organization that has grown to include some of the largest practitioners of co-registration and lead generation. Among other priorities, OLGA stands ready to defend our industry's honest operators from quick-buck artists who, sooner or later, could very well spark additional regulatory oversight to our industry with their misleading and outright fraudulent activities.

The most basic definition of co-registration (done properly) is what occurs when consumers enter personal information on a Web site while registering to access that site, then explicitly request to have their information sent to a specific advertiser. Usually, consumers are presented with advertiser logos and/or offers during the registration process and can check a box next to each offer if they so desire. The advertiser then sends the consumer an e-mail containing a discount coupon, free trial, newsletter, special offer or whatever. Note that this process does not involve the selling of personal consumer information to third parties. In this case, a lead generation company is simply acting as an electronic conduit between the advertiser and the Web site and does not own the personal data, and therefore has no right whatsoever to sell the data to anyone else. The lead generation company simply transmits the personal information from Web site to advertiser, pays the Web site and gets paid by the advertiser.

The key to a good online lead-gen provider is not in simply brokering this transaction like a realtor, but rather in providing the technology and know-how to show the right offers to the right consumers in real time--resulting in not only higher response rates, but, more importantly, higher conversion rates.

Here are some basics that advertisers should consider when constructing offers for co-registration respondents.

First, always know exactly where your offers are running. If you are dealing with a lead generation "network," insist on being kept abreast of all the Web sites that will be hosting your offer. Sure, it can be a lot of work to monitor networks, but your brand and your brand's reputation are at stake. Such monitoring also will reveal to you what other offers your brand will be associated with, and whether the network is trying to trick consumers into opting-in with such tactics as pre-checked boxes. Nothing is more annoying to a Web site registrant than having to un-check dozens of boxes, just to get to the next step in the registration process without receiving unwanted and unwelcome emails.

Further, Web site publishers should also avoid co-reg offers that utilize pre-checked boxes and multi-page offers--what could be more counterproductive than having your ancillary revenue model irritate users to the degree that they leave your site before finishing your (primary) registration process?

Having done due diligence as to where your offers are running, send to consumers only the information on a product or service that they indicated they wanted to receive. (If someone requests information about American Express Cards, don't send them a pitch for American Express insurance.)

If a marketer plans on remarketing more than one product to the user when the user selects an offer, the marketer has a responsibility to inform the user as prominently as possible. Simply hiding the message in six-point type in a Privacy Policy doesn't cut it. Be upfront and transparent with consumers, because it will benefit you (and our industry as a whole) in the long run.

The bottom line is that, as the IAB's numbers indicate, co-registration has a very bright future indeed. Done properly, it represents a revolution in marketing that takes full advantage of our wired, information-driven marketplace. How quickly it progresses and how far it goes is dependent on little more than common sense. Co-reg providers need to use common sense in how they conduct their businesses--and advertisers and publishers need to use common sense in choosing and evaluating their co-reg providers.

If they do, the sky is the limit and we can well expect to see co-reg/lead-gen enjoying an increasingly large piece of the online advertising pie. If they do not, we can expect increased skepticism, regulatory oversight and perhaps even a few well-publicized hedge fund-style collapses and litigation.