SPOTLIGHT ON.. Michael Krongel from Intermark Media

Adrian: Tell me a little bit about yourself and what you’ve been up to.

Michael: I’ve been involved with marketing for as long as I can remember. I’m 29 years old, grew up on Long Island, New York and used to work for a financial services company, producing their marketing on the Internet. That venue became so successful for me, I concluded it made the most sense to move out on my own and start my own marketing company. Intermark Media was created as a result.

Initially, our main focus was generating debt consolidation and mortgage leads for credit counseling companies and mortgage brokers. We finessed that model for about four or five years. Over the last year and a half, we’ve seen incredible expansion and strong growth in categories outside of debt consolidation and mortgage lead generation that excite us.

Adrian: You are one of the people that really pioneered this kind of lead generation. Is that correct?

Michael: Yes. Back in 1999, when Intermark Media started, everyone else was out there paying for CPMs that were in the $20 to $50 range. Our business was built strictly on a results-based model where we generated leads at a fixed cost and assumed the risk of generating those leads for our clients. At the time, there was really no one doing this.

Adrian: How did that actually work?

Michael: At first it definitely was very difficult.

We had a lot of smaller sites that were getting traffic and were struggling for advertising dollars. So the CPA model allowed them to bring in advertising dollars without having to manage a sales force. That’s really what we focused on, mid- and low-tier type of web sites.

The other force that drove most of our traffic was e-mail marketing at the time.

Adrian: Did you perceive that long term you had it exactly right and everyone else was wrong?

Michael: Somewhat. We bought a lot of CPM campaigns on a banner level and an e-mail level. And every time we did it, no matter how good our creatives were or how good the conversions, it never backed into the ROI that was needed for us.

We spent several hundreds of thousands of dollars over the course of two years really trying to make CPMs work. They just never did.

Adrian: What kind of leads were you able to generate back then?

Michael: At our high point, we were doing about 90,000 leads per month.

Adrian: So what I understand is that the margins then would have been a lot stronger than they are today?

Michael: There was a lot less competition so we were able to get media cheap, and we were able to sell at a good price. The margins now are definitely a lot tougher.

Adrian: What was your very first offer that you started generating leads for?

Michael: The first thing that we really promoted out there was freedebtconsolidation.com. It’s still one of our main sites that we promote for debt consolidation.

Adrian: You have a TV commercial as well?

Michael: Yes. We dabbled in results-based TV lead generation. We partnered up with cable TV providers and networks. Whenever they didn’t have a time-slot sold, they would air our commercial and we would pay them for every person that called the phone number.

Adrian: Do you sell a variety of lead sources or just to one main client?

Michael: We probably have about 25 active clients on the debt consolidation side of our business. In peak points, we probably had about 100 active clients. The debt consolidation industry, over the last year and a half has come under heavy scrutiny from the government. It became an industry that just wasn’t growing anymore.

In response to that, we started to expand our lead generation capability into other categories, such as credit repair, payday loans, automotive warranties and automotive refinancing. This month, we launched a health insurance lead generation campaign and a life insurance lead generation campaign.

Adrian: What were your big years?

Michael: We started taking in a lot of traction in 2001. Our biggest year was 2002, and 2003 was another big year. We felt the slow down of the credit counseling, debt settlement market in 2004 and 2005.

Adrian: One of the companies that’s come along and is doing things pretty aggressively is Quinstreet. They’ll look for little web sites that have traffic, and they will sign one-year contracts with them. From what I understand, there’s been some resistance in the industry to contracts. What’s your opinion on that?

Michael: I’ve never put anybody into a contract. I’m a big believer of the integrity of business and a handshake in a relationship mode.

You’re going to want to work with us because it’s working well for you. If it’s not working well for you, I don’t want to force you into working with us.

I think sometimes contracts do that, where it may start out as a great relationship, but something changes in either the industry or one of the two businesses that’s entered into the contract.

You often get bad feelings if someone’s locked into an agreement they want to get out of.

Adrian: Can you give us an idea of the number of publishers you’re currently working with?

Michael: It’s a couple of hundred.

Adrian: What is the typical volume?

Michael: The average affiliate generates about $15,000 to $20,000 a month in revenue for us. We probably have about five or six affiliates that exceed the six figure mark.

Adrian: So you’ve got the relationships. Those guys trust that your offers convert, so their ECPM’s are OK. They know that you pay on time. Now you’re leveraging that relationship into other markets?

Michael: That’s exactly what we’re doing.

Adrian: One of the things that I’m hearing about the payday loan market is that it is very competitive. Has that been your experience?

Michael: It is very competitive. We broke into generating payday leads back in December. Since then—each and every month—we’ve pretty much doubled what we’ve done the month before. So, we’ve found it pretty easy to build up some volume in the payday market. This may be due to our experience in a financial market with debt consolidation prior to it, and the affiliate base we already had.

Adrian: What are your main markets? Where do you generate leads for traffic from?

Michael: We really focus on three main components in Intermark Media now—lead generation, the affiliate network, COPEAC and our list management division.

Basically, we use our affiliate network, COPEAC to drive traffic to advertisers that we’re not hosting their pages or aggregating leads out-through.

Outside of the affiliate network, we also have developed a successful lead generation portion of our business, which is what produces the debt consolidation leads or our mortgage leads. In addition, pre-foreclosure, credit repair, student loan debt, tax debt, health insurance, life insurance, car warranty, auto refinance and payday loan leads are generated through us.

Adrian: What are the strongest offers?

Michael: Our strongest offers are definitely payday, our credit repair offer and health insurance offer.

Adrian: You started off in a market that you basically had to yourself and have done really well with it. It’s now starting to get competitive. Yet, you still continue to do pretty well. How do you explain that?

Michael: I think the reason it continues to work for us is the relationships and the people in the company. The other basis for success is the constant testing and tweaking of our offers for conversions. The conversions are very important in the CPA environment for the publisher, the advertiser and the middle aggregator as well.

Adrian: Since your company came from a more corporate culture, how do you balance that with the freewheeling Internet culture?

Michael: It’s a delicate balance between the two. The majority of our staff is a young team. We really like to bring people in that are fresh, that we can train and mold. Our office is really wide open and full of energy. Everyone collaborates and works together.

Adrian: But you have just one office for your whole team? You don’t have people working from home? You have them all come into an office each day?

Michael: Yes. It’s easier to communicate with everybody. It’s easier for people to collaborate.

We have four affiliate managers. They all work in one pod of desks for the most part. It’s open so that they can hear one another. We find this arrangement creates a healthy competitive atmosphere. They share ideas in real time. They’re all growing and achieving and going beyond their goals together as a team—as opposed to a fragmented group of individuals.

Intermark Media is a great arena for achievement. We’ve tried hiring people that worked from home, and it just was never as successful as the people that were internal.

Adrian: Can you talk about your company size, head count and revenues that you’re at today?

Michael: Head count, we’re about 24 people. Without getting into specific numbers, our revenues are exceeding our projections.

Adrian: Do you have some things that you want to talk about? What you’re doing with your networks and offers?

Michael: I didn’t mention we also own another company that’s located in the building with us. It’s a Call Center. There are about 100 employees that work in that company. It’s a customer service and sales-based Call Center. We utilize this team to further monetize our list management clients data.

What we offer our list management clients is to help them monitor their data in the off-line world as well. We’ll telemarket on the data files that they have. In short, we’re creating two streams of revenue as opposed to most of the other list managers out there that are strictly focused on the e-mail side of things, and only create one stream of revenue.

Adrian: What about other areas, for example, co-registration. You don’t seem to have that. Is that something you’re planning on doing? Or it’s not going to be a focus?

Michael: No. It’s my experience in the co-registration market that there is typically a lower value lead for the client. And I want to focus on something that’s just going to consistently get a higher ticket value as opposed to a lead that’s usually sold for less.

Adrian: Do you want to tell us a little bit about how CPA television worked for you, what you tried and what happened?

Michael: We created two TV commercials and marketed them on television on a CPA basis. It actually did very well for us at the time. We were probably one of the first lead generators to put a commercial out there.

At the time, we were in Penny Savers and off-line periodicals. We had a lot of competition. So, we moved to the Internet where we had no competition. In a year and a half later, we had a lot of competition again.

Hence, TV became the final frontier—the next place to go where no competition had gone before. It worked out well for us.

Adrian: What about these new forms of media appearing, like pod casting, You Tube and on-line TV? Have you got any thoughts of trying to do anything there?

Michael: I haven’t had much time to investigate into the success of pod casting and advertising in blogs. Although, it’s something that I’m definitely interested in looking into and learning more about. Because I do think that the current model of lead generation, that a lot of us operate under, is not going to last much longer.

I think when that demographic gets older, we’re going to have to come up with new ways to generate leads off of consumers. The old tricks just aren’t going to work anymore.

Some of those new ways may be through, you know, pod casting, blogs. I think social networks present another area of expansion that is just going to cull a huge niche for lead generation over the next five to ten years. That is, when somebody harvests the power of, like a MySpace and figures out how to generate leads through it.

I believe the trust factor is going to be tough to build with a younger generation as they start to mature. That’s why social networks—where there’s a trust factor already built in—are going to be kind of the next great place to generate leads.

Adrian: One of the things you mentioned is that you don’t think this current model will continue to work. What do you see happening to traditional lead generation? Do you think there’s going to be a consolidation? A lot of people are going to get pushed out?

Michael: I think we’re at a point now where we’ll probably start to see a consolidation of some companies. I’ve noticed more and more affiliate networks popping up each and every day. You see the relationships and trusts are built with a couple of core companies, and they’ll continue to maintain those. The barrier to entering this business is getting greater. It’s not what it used to be.

When I started Intermark Media, we put $20 in a bank account and started the business. And I don’t think you can do the same thing today and survive. It’s going to take a lot of money to get into the industry.

Companies will start to partner up and realize that two heads are better than one. They’ll try to do that for leverage.

Adrian: Have you had any people approach you for buyouts or acquisitions?

Michael: I have companies—at least two to three times a months—contacting us, about acquiring us or investing, and at the moment, we’re not interested.

Adrian: But you’re not interested in selling?

Michael: Not at the moment.

Adrian: Anything else that we should talk about?

Michael: We’re constantly looking for new partners both from an advertiser’s and a publisher’s stand point to work with. If there’s anybody out there that’s looking for opportunities to either grow their business or looking for new people to partner up with, they can definitely feel free to contact me.

Adrian: What address can they contact you at?

Michael: They can either send me an e-mail at [email protected], or they can feel free to give me a call directly at 631-719-1250 Ext 3121.

Adrian: Let’s say they’re working with another network or another lead generation company. What would be their reason to come to you? Why should they consider talking to you if they’re in a situation that they’re already quite happy with?

Michael: Just to test something and try something new to kind of give yourself that reassurance that you really do have the best product out there. If you’re not running the best offer out there, hopefully you’ll find one that’s a little bit better if you work with us.

Adrian: Great. Well, thanks a lot for making time. It was really good to talk with you.

Michael: Thanks, you too.

If you’d like to be interviewed by Adrian, sign up for his newsletter here: http://AdriansTips.com, and reply to the first message you get to contact him directly.