The (Crowded) Battle Field: Lead Generation

Behind the scenes of the online lead generation industry, there is a battle going on. Some may even say it is a battle of good and evil. I say it is a battle for survival.

I know you’ve noticed the incredible amount of new lead-gen companies popping up over the past year. Brokers, media masters and email marketing companies alike have realized the power of direct response marketing online, and are racing to build lead-gen platforms of their own. This is where the battle began.

The battle is: Who can build a site that generates the highest revenue per registrant, at the highest margin and get the most traffic while generating quality leads.

Due to the sheer volume of sites being developed, a marketing bidding war has erupted. To the winner of the war goes the most volume; but what do they have to give up to get that volume? Maybe some of their margin or lead quality. What can they do to optimize the lead so that the revenue per registrant increases as volume increases? As I’ve mentioned before, most companies take the lower road and resell their data, have it managed by multiple list managers and force friend referrals, opt-ins or CPAs. To these companies lead quality is not as important as volume, margin and revenue per user.

Very few companies choose to take the higher road and put lead quality first. They optimize leads by implementing technologies that rotate offers based on eCPM, serve ads based on demographic criteria filtering and scrubbing out bad data on the fly. These are the companies that usually get repeat business from their clients, work with big agencies and have a lot of brand-name offers.

When a company decides to join “the battle”, they need to choose which type of site they want to start. Each site type has its pros and cons, so this is a very important decision.

There are four basic types of lead-generation sites:
1) “Freemium” based with forced CPA prize redemption.
2) “Freemium” based with S&H required – no forced CPA
3) Sweepstakes
4) Content based

Most new lead generation publishers opt to build the first type of site because they can leverage the revenue they make off the forced CPAs to give away the gift and spend more on marketing the site. Sweepstakes are also very popular because of their great lure, but take time to get bonded and usually generate lower quality leads.

Clients seem to prefer the second and fourth method of generating leads because the process is straight forward and the user experience is much better. However, not many companies build these types of sites because there is usually no revenue generated off the registration unless the person opts in to an offer (or ten). As a buyer, the lead generation companies you want to buy from are those that have several sites, covering each of the four types. By doing this you have access to more volume and can optimize by site (get more leads from the sites that work and less or none from those that don’t).

So why is it a battle for survival? Ask any affiliate network manager, email marketer, list manager or media sales rep. These lead gen marketing offers are EVERYWHERE, and there is more of the same everyday. There is so much competition. Sooner or later companies who can’t make the model work, or take shortcuts to make a quick buck, will fall of the radar.

Why will they fall off? There is a cyclical nature to our business, and if a company is missing any of the key links, they will fail.
Check it out: To make money in the lead-gen biz you need good clients. To get good clients you need good leads. To get good leads you need good traffic. To buy good traffic you need money. And so on, and so on…

The companies that will last are those that keep their client’s best interest in mind, create sites that break through the clutter, and stay on top of lead generation technology. I am very interested to see who ends up winning the battle, and I am sure you are too.