Commentary

If It IS Broke... Fix It

Lead generation is fast becoming the darling of the Internet space. What other industry can boast annual growth in excess of 70%? In the last two years alone, we've witnessed just about every possible approach and methodology to generating leads both online and offline.

Of course, with growth comes challenge, and with challenges, opportunities. So while it seems like every day a new "agency" opens its doors attempting to cash in on this boom, those of us who have been living in the online trenches for awhile, now have gleaned a few helpful insights I'd like to share with you.

Here are a few rules for the proper care and feeding of clients, as well as a proven methodology for determining the validity of an intended offer; and, in the end, maximizing the long-term potential of delivering the right kind of ROI from your advertising expenditures. After all, all leads are not created equal.

Rule #1: Don't Harm The Brand That Feeds You

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Ask any advertiser who lives and breathes by acquiring new customers what they consider to be the biggest threat to their professional standing, and in most cases they'll say the need to control and monitor both where their message is displayed and what it says. Unfortunately, for many businesses, the real-life experience in this space has been fraught with inappropriate and/or non-value based placements by companies both large and small. I've seen publicly traded media companies place offers with second-tier vendors leaving little or no control over where their client's message appeared and worse, the specific contents of the message. If anything should be causing great alarm to advertisers, it is this utter lack of control of their brand's message. So first and foremost, be sure to scrutinize the wording of any insertion before taking the leap of faith into content-land. Ask yourself; is there any potential harm to our brand?

Rule #2: Be Sure Your Media Parts Add Up To A Whole

The primary focus of any lead generation strategy is media mix and distribution. Here are the questions any advertiser should ask their media agency of record and any associated vendors before committing funds to a plan:

  • Where does the company get its traffic?
  • Where will the offer be displayed?
  • Will the offer be re-sold? If so, will I have approval over these networks in advance?
  • Does the company receive traffic or benefit from other lead providers?
  • How do they get their traffic?
  • Do they buy media and deliver leads or do they buy leads from "partners"?
  • How do they track "click-throughs" and referring URLs?
  • Do they scale delivery slowly or deliver volume from the first minute, hour or day (known as "slamming")?

Rule #3: Don't Let This Happen To You

A large company engaged a publicly traded media concern and entered into an agreement to buy leads. The program's cost was quoted as $15 per lead. The advertiser looked at the network's Web site and determined that it appeared to have a very broad and capable media network. The advertiser did not question whether or not the offer would be re-sold, nor did it request that the offer only be displayed on top-tier properties (most media concerns have several levels of service and most large ad networks engage in the affiliate space). In addition, the advertiser trusted that the media network would never place the offer within sites that are solely based on "freebie" content. Lastly, the advertiser forgot to request that there be a cap on the first two week's lead volume.

Result? Within two hours of going live, the offer was re-sold to a broad array of lower-tier networks at $10 per lead. These networks were not made aware of the display rules and placed the offer in many places that it should not have appeared. The offer was then resold again to an even lower tier network at an even lower rate of $5, and that network was not even verifiable as a legitimate company.

Within a week, the advertiser had 50 percent of the volume and the internal CRM or Sales Response Team struggled to sort through the volume. Then came the truly bad news, what we like to call "lead mutiny." The internal team did not respond or purged the data because it was of little or no worth.

Clearly, this advertiser proceeded wrongly and at the end of the day paid $15 for a $2 to $5 lead. The entire metric being used for that price was based on a flawed model, and therefore, only created a lessening of the price and a lowering of the bar.

Rule #4: Try This Best-Practice Approach

A shared risk model, with a fair price based on "display media buys", would have been the best option. For example, if the latest media buy on Yahoo delivers leads at an average of $78, the lead generation company takes over the risk of buying the media, and only charges the client a cost-per-lead fee of $54.60 per lead or (30 percent off of their self directed media CPL).

Here's one approach to avoiding any kind of brand damage: create a micro-site that is non-branded but exclusive, thus giving the advertiser an opportunity to have arms' lengths distance from the campaign.

And if you're engaging your partner to buy "leads" in the broader market, have them create terms that ensure that no offers will be resold -- nor will they be fooled into running into market segments that are not clearly defined. Click analysis will show the source of the lead "referrer." If it is found that the source is not a verifiable media concern or that the site is not constructed of information that shows relevant value, they need to take strong action against the concern.

Remember: there may be a lot of leads out there... but all leads are certainly not created equal.

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