Deceptive marketing and lead generation
My most recent article for The Industry Standard is up on the site now: What the ValueClick settlement means for the future of lead generation. Why don’t you go read it? And hey! Why don’t you leave a comment if you have something to say.
For those of you who don’t know the background to the story, ValueClick just recently agreed to pay $2.9 million to settle the FTC allegations that they were doing bad things with their business, including:
1) Lying to consumers, advertising free offers, but then requiring consumers to pay or purchase to qualify for those ”free” offers.
2) Violating federal law, specifically, the CAN-SPAM act.
3) Not securing customers’ financial data, even though they promised to secure it.
The press release from the FTC with the complete list of charges is here.
ValueClick will admit to no wrong-doing. Here’s what ValueClick says about the charges:
“The FTC alleged that the Company utilized deceptive marketing practices that violated the CAN-SPAM Act and FTC Act. In an effort to resolve this matter, ValueClick agreed to a settlement payment of $2.9 million without an admission of liability or conceding that the Company violated any laws.”
Having worked in the lead generation industry for years, I know that this is not the norm in lead generation and that most lead gen companies follow solid business practices; but yet, these types of scams do happen fairly frequently. Lead generation is a big business in the U.S. (see images below) and gettng bigger as companies realize the value of generating data that can provide specific metrics and ROI. So companies will use many different tactics – not all of them aboveboard – to generate leads for their clients.
If you’re doing lead generation through a third-party provider, make sure that you get them to explain in detail the following things:
1) What the environment looks like in which they will be generating leads. If they are creating a registration form, make sure that they show you what it looks like.
2) How they are generating the traffic that drives the leads.
3) If they are doing “co-registration” to generate their leads. Co-registration is the practice of including a check box at the end of another registration form so as consumers register for one thing, they also can “opt-in” for your thing, too. If they are doing co-registration, find out if the box is pre-checked, and if it is, run the other way.
4) Ask for a client reference – they should be willing to let you talk to someone else who has used the service and found it reputable and helpful.
Here are those lead generation numbers that I promised. This image is taken from the BtoB Magazine’s Interactive Marketing Guide for 2008, which has a lot of great online advertising data.
Popularity: unranked [?]
Tags: co-registration, FTC, Internet advertising, Lead generation, marketing, Online marketing, ValueClick
March 31st, 2008 at 5:27 pm
Melissa, nice post. You are right about the strength of the online lead generation industry. It’s the fastest growing segment in the online marketing arena because it works for advertisers. And advertisers are getting much more sophisticated in their ability to track conversions by sources, so the market will weed out the bad apples. Still, if companies continue to ignore best practices, they’ll not only lose clients, but will also further erode consumer trust in online marketing in general, which could harm not only lead generation providers, but the entire online marketing industry. Jere Doyle, http://www.prospectiv.com
April 27th, 2008 at 4:23 pm
Why all these online lead generation like online advertising and emails to “checked” lists.
On the other hand the website of any company attracts visitors, visitors who are interested, because they found teh website by using a search engine or a reference on another website.
Just investigate on these visitors.
Of course you will need a system or service to reveal the company names. And the pages visted.
This will allow to qualify the visitors to leads or not.
June 10th, 2008 at 9:16 am
Melissa,
Your article is right on target. Some bad apples can spoil it for all the other marketing and lead generation businesses out there. I can’t imagine anyone paying out $2.9 million and insisting that they did nothing wrong. I guess they are trying some of their own lead generation and looking for really stupid people that actually believe them.