• The Wall Street Journal, Tuesday, August 14, 2007 11:15 AM

The effectiveness of lead generation based on incentive offers has always been questionable. Consumers often want the prize, but have little interest in the marketer's product.

Now, the practice has also come under scrutiny from the Federal Trade Commission. The FTC is likely concerned about possible privacy violations or false advertising claims. The result is that some marketers are backing away from the technique or shifting to the more painstaking approach of finding consumers who have already shown interest in a product.

With consumers spending more time online, marketers have begun paying digital marketing firms to collect names of potential customers on the Internet. Online marketing revenue from lead generation nearly doubled to $1.3 billion in 2006 from $753 million in 2005, taking it to 8% of the total online ad market last year, according to the Interactive Advertising Bureau and PricewaterhouseCoopers.

Read the whole story at The Wall Street Journal »