Clearing The Air: Incentive Sites And Online Lead Generation

This past year there's been much controversy in the online lead generation category regarding so-called "incentive sites."

As a person who has worked in online lead generation since its formative days nearly a decade ago, I'd like to take the opportunity to clear up some of the confusion and misperceptions.

First, incentives, per se, aren't a problem; we all know they've been a common, effective promotion since the days when William Wrigley Jr. first offered merchants free chewing gum to buy more of his baking powder. Citibank offers consumers free $100 gift cards for opening a checking account. Avon offers free cosmetic bags for spending over a certain amount.

Online it's no different. You'd be hard-pressed to find a major brand, for instance, that doesn't offer some kind of incentive on its Web site -- a free newsletter, a contest, sweepstakes, access to recipes, coupons, etc. -- to motivate the consumer to register his/her name and contact information for the company's ongoing CRM initiatives. This is standard online lead generation, and brands are doing it not only on their own sites but across thousands of publisher sites via ad networks.

It's actually within a small niche of those publisher sites that the confusion and controversy originates.

There are certain publishers whose business model requires consumers to select a set number of online lead generation offers from a specific list in order to get an incentive -- often a big-ticket item like a laptop or plasma TV.  On some sites, the consumer may have to additionally refer a set number of friends, who must also complete the same process for all parties involved to receive something for free.

It is these sites that have been the subject of the controversy and Federal Trade Commission scrutiny this past year. However, contrary to prevalent misperceptions, it's not because they use incentives to motivate consumers to register or because they promote lead generation offers; it's because they were accused of misusing the word "free" in their advertising and not clearly disclosing to consumers the terms to get the free gifts.

Confusing matters further, not all lead generation offers that appear on incentive sites fall into the required category. Most of the sites whose business model centers on attracting consumers with incentives and free promotions also include lead generation offers that are always optional -- the consumer is never required to take any of these offers to receive the free promotion.

To help the industry navigate these potentially tricky waters, the Interactive Advertising Bureau recently issued specific guidelines for incentivized sites in its "B2C and B2B Best Practices for U.S.-based Advertisers and Publishers." (Full disclosure: I'm the chairperson of the IAB's Lead Generation Committee.) To quickly summarize, the thrust of the recommended practices regarding incentives is simple transparency:   



·    Clearly disclose to consumers exactly what they need to do in order to qualify for the free gift or other incentive; if they will be required to pay money as part of any offer; and if their information will be shared with third parties.

·    Clearly disclose to consumers which offers are required and which are optional.

·    Clearly disclose to advertisers -- and get their written approval -- if their offer is included in a required section where the consumer will receive an incentive from the publisher to take the offer.In short, publishers and advertisers must operate in complete transparency to each other and consumers, which is the right approach for any marketing initiative, really.

But what about lead quality? There remains a popular notion that any lead that comes from an incentive site is a bad lead, since the consumer's interest in the advertiser's offer is supposedly compromised by his interest in the incentive.

So are leads generated on sites that feature incentivized offers of inherently lower quality than those from other sites? I think this is one case where the free hand of the market provides a simple answer. If the leads were bad, marketers would stop advertising on incentive sites and the model would have failed by now. Or, marketers would simply adjust their rate.

In any case, with proper targeting based on consumer demographics and behavioral data, high-quality leads can be generated on any site on the Internet, irrespective of the types of promotions the site offers.

To take a step back and put things in perspective, online lead generation has been the fastest growing online ad vehicle for the past two years in a row. And it's not because it's an easy way to scam unsuspecting consumers. Rather, it's because major brands recognize online lead generation as a valuable, cost-effective way to connect with interested consumers who have not only expressed a desire to be contacted about the brand's products or services, but have also provided the company with explicit permission to do so.

It's in the best interest of all concerned -- advertisers, publishers and consumers -- that we as an industry always follow best practices to ensure this valuable category does not fall victim to the confusion and controversy of the past year.

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