Online lead generation

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Please improve this article if you can. (March 2008)

1 Online Lead Generation
2 Market Dynamics
3 Online Lead Generation Innovations
4 References

[edit] Online Lead Generation

Online lead generation advertising includes a number of internet-based techniques for generating sales leads and winning customers.

A GP Bullhound Research report states that from 2006- 2007, the online lead generation market grew at 71% YTY - more than twice as fast as the online advertising market. Today, the online lead generation segment is valued at $1.3 billion, and is expected to cross $2 billion by 2008. The rapid growth is primarily driven by the advertiser demand for ROI focused marketing.

To meet the increased demand for online lead generation marketing, the number of publishers offering online lead generation programs has grown exponentially over the last year.

Many types of advertising such as direct marketing, online banners and search marketing are deployed for the purpose of lead generation. However, due to large drop-offs in clicks and conversions, these methods are inefficient.

Opt-in units are the most common types of advertising utilized by the online lead generation advertising. These are ad formats that enable consumers to explicitly opt-in to an advertiser offer without leaving the website on which the ad was displayed.

The most common types of opt-in ad units are:

Co-registration advertising: The advertiser receives some or all of the standard fields collected by a site during the site's registration process.
Custom co-registration: The advertiser receives the standard fields collected by a site as well as answers to few custom questions – e.g.- Have you traveled overseas in the last six months?
Full Page Lead Generation: The advertiser's offer appears as a full page ad in an HTML format with relevant text and graphics. The advertiser receives the standard fields and answers to as many as twenty custom questions that s/he defines.

Other types of lead generation advertising include:

White paper syndication: The advertiser offers industry research or a white paper in exchange for user contact information.
Webinars: The advertiser offers online presentations on a particular topic in exchange for user contact information – more commonly found in the b2b world.
Custom editorial sponsorships: The advertisers sponsor a section on the web site. To access the information in the sponsored sections, consumers give advertisers their contact information.

Commonly used terms and best practices in online lead generation are defined in the [Online Lead Generation Glossary.]http://www.pontiflex.com/download/leadgenerationglossary.pdf

[edit] Market Dynamics

In an economic climate marked by uncertainty, online marketers are increasingly investing a greater amount of their advertising dollars against CPL (Cost per Lead) online lead generation campaigns.

Advertisers pay for impressions in CPM (Cost per Thousand Impressions) campaigns. CPC (Cost per Click) campaigns require that advertisers pay for clicks. In either scenario, there are no guarantees that impressions and clicks will convert into qualified leads. In contrast, marketers pay exclusively for leads in a CPL campaign. ^[1]IDC, March 2007.

On the other hand, the online lead generation market suffers from a lack of openness and transparency caused by the proliferation of third party brokers. In the absence of effective self-regulation, some less than scrupulous marketers have been guilty of deploying spurious incentives to generate leads, a practice that has attracted the wrath of none other than the mighty Federal Trade Commission (FTC). To maximize revenue, many of them utilize questionable practices that include

Running offers on less than credible sites (sites that promise free iPods)
Presenting irrelevant offers (free iPods for online degrees)
Tricking consumers into signing up for multiple offers (unchecked opt-in boxes).

What’s bad for the consumer is bad for the advertiser. The lack of transparency has kept many online marketers away from the booming segment.

Unlike CPM and CPC marketers, CPL advertisers have no planning resources that allow them to access a listing of lead generation publishers and networks. As a result, advertisers are forced to go through third party brokers and agencies to deploy lead generation campaigns.

Because advertisers have no insight into where their offers are running, they cannot map leads to their respective sources, and make informed optimization decisions. Because campaigns are deployed through brokers, advertisers cannot turn publisher venues on and off.

Finally, in the interests of maximizing revenue, some brokers and networks sell one lead to multiple advertisers. Typically, these leads are associated with a category (finance) as opposed to a particular brand (Well Fargo). Generic leads are not brand specific, and consequently tend to have a lower conversion rate. Furthermore, many advertisers compete for one lead, dropping the conversion rate even further.

[edit] Online Lead Generation Innovations

Given the increasingly ROI minded focus of online marketers, the online lead generation segment is expected to maintain its impressive growth. The industry segment has begun to take notice of advertiser demand for increased transparency.

An increasing number of transparent single publisher sites such as Hillclimb Media, Orbitz.com and Monster.com are offering online lead generation advertising opportunities to advertisers.

Innovations such as the Pontiflex GENList enable advertisers to find and connect transparently with publishers directly and bypass the third-party brokers.

In addition to these industry innovations, industry associations such as the IAB and the Online Lead Generation Association are playing a leading role in enabling transparency in the online lead generation marketplace.