Posts Tagged ‘Lead generation’

Banners get a boost

Monday, December 15th, 2008

I give a lot of attention to performance-based advertising formats such as search and lead generation. While I’m bullish on both at all times, I especially think that they are easier to buy and defend in a bad economy. Today Fred Wilson over at A VC wrote this post about a comScore white paper that described the lift that is generated by display advertising (banners). This article is definitely worth a read.

Banners definitely provide a positive benefit for advertisers. (And this research certainly proves it.) Like television, billboards and radio advertising, they defintely promote brand awareness, and, based on this study, a lift in sales. But the issue still remains that without a research study like this one running to measure the effectiveness of a specific banner, it is impossible to measure its ROI. And in this economy, it doesn’t matter how many studies like these are released, marketers are going to be looking for 1-to-1, measurable ROI.

Boost

Photo by Travis Isaacs

Types of online advertising

Friday, August 22nd, 2008

My cousin Jay (hi Jay!) is in the process of building and launching his own online business, and he sent me a note this week (OK, he sent it two weeks ago, I’ve been busy!!) asking me about online advertising and how it works. I ended up writing him a fairly long-winded email in response, but I thought that there were enough nuggets in the message to make it worth re-posting.

Offline advertising

Here is a (somewhat edited) version of the email that I sent him. Please forgive me for the rough format.

The most basic type of Internet advertising (which is sometimes called “online media” or just “media”) is the standard banner ad. The banner ad has been around for years and was pretty much the first type of advertising that was sold online. When banners first went up, they got high click-through rates and companies could charge high fees for them, but the rates have dropped significantly over time. Banner advertising is usually sold based on a CPM (cost per thousand) basis calculated against page views. CPMs vary depending on the market that you’re in – consumer markets get a lower CPM than B2B markets – and they range usually anywhere from $10-$40 (approximately). The reasons that B2B audiences can charge a higher CPM is that there is the assumption that they are reaching a “higher qualified” more “high-value” audience. To sell this type of advertising, you’ll need quite a bit of traffic, and some information for potential advertisers about the type and quality of audience you reach. Demographics, reach, influence, etc. will all help. In the consumer market, advertisers are looking for a lot of reach – meaning high numbers of page views. Also, to run banner advertising on your site, you’ll need some kind of third-party ad server (a company that serves the ads and measures delivery and click-through for you), such as Doubleclick/DART. Also, it’s probably worth mentioning that “banner” advertising has evolved to include all kinds of ad sizes and types, such as skyscrapers & leaderboards (refers to ad sizes), interstitials (the type of ads that pop up as you go from page to page on a website), overlays, etc.
 
If you are interested in running banner ads on your site, but you don’t want to have to sell the ads yourself, there are a lot of third-party ad networks that will use your available inventory (pages on your site) to run their ads, and you get a percentage of any revenue generated. This is a good option for early in a business when you don’t have the sales staff and technology resources available to do serious selling. Blue Lithium, Tribal Fusion and Casale Media are some companies that do this.
 
If you don’t have the page views that you need to sell straight banner ads on a CPM basis, you might try to sell a site “sponsorship.” This is often harder to sell (especially these days) because with sponsorships you aren’t necessarily guaranteeing page views or any other measurable metric (although you could guarantee those things), but instead you are offering companies the chance to have exclusivity or sponsorship of a specific section of your site. Sponsorships can get complicated, but you can basically cook up any kind of arrangement that you can think of.
 
Google AdSense is a great way for publishers (and Websites) to get started with online advertising. It’s easy to sign up for an account, and by setting things up and “playing with” Google’s tools and going through the training, you’ll pick up a lot of the online advertising terminology and best practices. It’s also the kind of thing that you can set up and forget – so it will just run and serve on every page of your site without a lot of interference. I run Google AdSense on many of my sites, and it does produce revenue – again, the higher the value the keyword and the more page views you have on your site, the more money that you’ll make. On the flip side (from the advertiser’s perspective) most marketers who do online promotion use Google AdSense (although when you use it to advertise, it’s called AdWords), primarily because it’s a type of “performance-based media” that shows advertisers/marketers immediate “ROI.” These two terms you will see again and again with online advertising, as the trend with online marketing moves to media that has measurable results. The other great thing about Google AdSense is that it will help you quickly be able to track your monthly traffic and page views and what your traffic is “worth.” So if you’re doing financial modeling you can include that data for potential investors.
 
Another ROI-based type of online advertising is lead generation. Lead generation is when an advertiser/marketer pays you money to know more about specific members of your audience than just that they “viewed” an ad. With lead generation, advertisers usually get contact information (either email, phone, mailing address or all three), and other pieces of data that they consider to be valuable. With lead generation, companies are able to get anywhere from $10-$200 PER LEAD (as opposed to the $10 CPMs that I mentioned earlier), because the companies are willing to pay to know specifically who their potential customers are, and for the ability to market to them in the future. Lead generation works best on a site where users need to register to access data/services/etc. 

 

A variation on lead generation is co-registration, which is where a company that collects registration data can add a question or a check box on their registration form asking “would you like to receive information from X company?” If the user checks that box, they are “co-registered” for both your site and the other company’s site, as well.
 
ONE WORD OF CAUTION ABOUT ONLINE ADVERTISING AS A BUSINESS MODEL. (This was applicable to Jay, but might be relevant to you as well, so I’m leaving it here.) Since you are building a site that requires users to enter a lot of data, fill out forms and generally interact with the site a great deal in order for the site to be successful, you will need to think very carefully about on which pages it makes sense to have advertising. For example, running Google AdSense is fine on an information page (a page that someone gets to and might realize that they are in the wrong place), but putting Google AdSense on a registration page, where it might distract a potential registrant from completing a form, is not the best idea. In that instance, getting them to complete the reg form is probably worth far more than having them click that Google AdSense link.

 

I hope that this helps someone out there! If you have any questions, please feel free to post them below and I’ll try to answer.

Deceptive marketing and lead generation

Thursday, March 27th, 2008

valueclick logoMy 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.

Lead generation statistics

Does audience size matter?

Monday, December 31st, 2007

I have been thinking about this post from Robert Scoble since I read it yesterday. (Go read it now.) In the post, Scoble makes three pretty strong points:

First,

“In the past few years I’ve had some success building audiences, but I found that that’s not really what’s important. It’s not what advertisers REALLY care about.”

He goes on to ask “What do they really care about?” and answers his own question by saying that advertisers care about content: that you get content that no one else does, that it causes conversations to happen, that your content gets noticed in the niche that you’re covering, and that it gets the most authoritative links back to it.

His second point:

“It’s not the size of your audience that matters. It’s WHO is in the audience that matters.”

And his third point:

“I never talk…about how large my audience will be. No, instead, we’re talking about who we want on the show for the first week. How can we make the quality better? Who is out there who is doing innovative stuff that we can learn from?…How can we take our art further? How come bloggers never obsess about THAT?”

There is a lot going on in this article, but first and foremost I have to disagree that advertisers don’t care about audience size. All you have to do is look at how advertising is sold online to know that they do, in fact, care very much about audience size. CPM (cost per thousand) is the standard measurement for online media sales. Just check out the advertising pages for CNET or PCMag.com  or CMP (all technology publishing companies). What is the first statistic that’s listed? Unique visitors per month. Second statistic? Unique page views per month.

Having worked for both Ziff Davis and IDG, two of the biggest technology publishers in the world, I know that when technology marketers are buying online advertising packages, the easiest question to ask – and the first one out of their mouths – is size of audience. They always want to know traffic stats and reach. In that market, advertisers do care about how big the audience is. And I think that this is only magnified in the consumer markets (with audiences like the one that Perez Hilton reaches), where there is no way to measure audience except by size.

And (this is still hard for me to swallow even though I’ve believed it for a long time), most advertisers do NOT care about how good the content is. I am just being honest here. Most technology marketers and advertisers do not pay attention to the content, or know how good or not good it is in and of itself. Instead, they measure content “goodness” quantitatively – by how big the audience is that is reading the content, and by who that audience is.

Which leads me to the part of Scoble’s article in which he was dead on accurate – advertisers do care about how targeted the audience is, WHO is in the audience. I believe that this is actually the statistic that matters the most to online advertisers.

Take another look at those advertising pages that I linked to earlier. There are some pretty strong arguments made by the publications that they have the specific audiences that advertisers are looking for. I believe that this trend of advertisers trying to reach the specific individual – with the right title, job function, industry and size of company – instead of reaching just a whole lot of people and hoping that the message has an impact, will continue. This desire to reach the RIGHT audience is why new models of online advertising are emerging, such as lead generation, in which a company will pay $100 PER LEAD as long as they are targeting the right person with their message. Scoble is reaching the audience that his advertisers want to reach – so the size of his audience isn’t as important. And this is why sites like Perez Hilton, which have to rely on audience size (because they are reaching a disparate consumer market) are going to have a hard time selling advertising by any measurement except audience size.

As far as content is concerned, I have already made the point that I don’t believe that advertisers care as much about quality content as Scoble claims that they do. I wish that they did, but I’ve been in this industry long enough to realize that they really just don’t. They like the latest and greatest thing – because it’s good for their brand to be associated with that innovative content – but advertisers aren’t content specialists and just really don’t have a good understanding of quality content.

HOWEVER – and this is a really big however – I think that Scoble is writing from the perspective of a content producer, not an advertiser. And his point is RIGHT ON that content producers MUST CARE MORE about their content than their audience size. Because without good, innovative, cutting-edge content, content producers will never draw the type of audience that they need to get advertisers. Scoble says that the right question is “how can we take our art further?” And I agree that is the right question for a content producer.

Google could really hurt my self-image by asking if I'm fugly

Wednesday, November 21st, 2007

There was a huge protest when Google debuted paid search ads in Gmail. People are still debating whether this is a violation of privacy, or just good business practice.

Personally, I don’t mind too much that Google peers into my inbox to read my messages and serve me relevant ads. Partly this is because I make my money through Internet business models and appreciate the forward-thinking (and money-making) brains behind Google, and partly because I just don’t have any secret e-mail that I want kept private. Yes, for you privacy advocates, I understand (and agree) that we have a right to privacy. But Gmail is a free, commercial service and no one is being forced to use it. So I don’t mind the ads.

Until today when I opened my inbox and found this:

Gmail FUGLY ad

Isn’t Google supposed to be reading my e-mail and delivering me relevant advertising? How is this relevant? Do they suddenly have a camera on me, too? Am I fugly?!

So I couldn’t resist, I clicked the link because I had to find out if I am fugly, and the link took me to the World Of Quizzes, where I had a chance to take the “Are You Ugly Quiz.”

Are you UglyI know you are dying to find out the verdict, but I can’t tell you because the quiz was all a front for some terrible co-registration marketing service.

WARNING: Do not be sucked in by this quiz even to attempt to discover if you are ugly. I actually took the quiz (as part of my research for this post, really!), but I was subjected to AT LEAST 50 ads, and I never saw the results of the survey. I am not exaggerating. I quit before it was over when I started having to click off 20 check boxes saying “no I am not interested” on each page.

It appears that Prospectiv is the source of this site – and the nightmarish number of ads. (At least according to the logo on the quiz pages.) I would love to hear some stats from them on how many people actually become leads as a result of this lead capture methodology – and if anyone that takes the survey actually makes it to the end to find out their results. I am all for creative marketing, but this example seems to take it too far.

KnowledgeStorm acquired by TechTarget

Thursday, November 8th, 2007

TechTarget logoKnowledgeStorm logo
This would have been huge news in my previous life working for Ziff Davis. It will be interesting to see how this changes the IT lead generation industry. With KnowledgeStorm and Bitpipe (TechTarget’s lead gen engine) teaming up, this leaves four major players: the Web Buyer’s Guide (Ziff Davis), IDG Connect, BNET (from CNET) and the KnowledgeStorm/Bitpipe combo.

Prior to this acquisition, KnowledgeStorm was really the only independent IT lead generation option – all the others are tied to a known IT publisher with a large audience. I’m not sure how TechTarget plans to combine the services, but each has something to offer – Bitpipe has the audience and reach, and KnowledgeStorm has an existing client base and superior technology. It will be interesting to see how this shapes up.

The solution to search engine fatigue

Wednesday, October 24th, 2007

Internet users are tired of trying to use a search engine to find something that they want, and not finding that thing. This seems obvious, but it’s the conclusion that’s been reached following a recent survey of 1,001 U.S. adults called “State of Search.” The research was conducted by Kelton Research for Autobytel. The primary finding from the study is that 72% of searchers have “search engine fatigue” meaning that they become impatient or frustrated when they are unable to quickly find the exact information they need when using a search engine.

I’m actually surprised that the number isn’t closer to 100%.

Some statistics from the report (thanks to Search Engine Land for this information):

- 65.4% of Americans say they’ve spent two or more hours in a single sitting searching for specific information on search engines.

- When asked to name their #1 complaint about the process, 25% cited a deluge of results, 24% cited a predominance of commercial (paid) listings, 18.8% blamed the search engine’s inability to understand their keywords (forcing them to try again), and 18.6% were most frustrated by disorganized/random results.

Search Engine Land draws the conclusion that this is an argument for personalization in search, and in part it may be. But I think that these results also point to the need for comprehensive and information-rich vertical search alternatives to aid in the buying process – not as a replacement to the popular search engines, but as a supplemental tool.

The difficulty of using the popular search engines in the buying process is nothing new. This study was conducted to illustrate problems in the car-buying process, but the same issues happen in other product buying cycles, including the IT buying process. When I worked on the Web Buyer’s Guide, the goal of the site and technology that we built was to provide a better technology buying process for IT professionals. At the time, I would do a demonstration to explain to people why this type of vertical search engine was essential for the buying process – and why Google and Yahoo wouldn’t work for buyers who were trying to do the research that’s needed to make a product purchase.

I used the term “CRM” (customer relationship management) to demonstrate. First, I would type “CRM” into Google to see the results – 83,900,000. I then modified the search to CRM Products – 34,300,000. Still too many results. This is the #1 problem with search engines for the 25% of people who complained about a “deluge of results” and why, in the survey results, nearly 40% of Americans described finding the “right and relevant” information in the big search engines – Google and Yahoo – as “overwhelming and time-consuming.”

The next search that I did was with WBG’s top competitor – KnowledgeStorm, another IT product directory. For the search, I went to their CRM page and asked someone in the crowd to name a random CRM company. Different answers were given, but usually one of the top companies was named, such as Pivotal, Oracle or Salesforce.com. Typically, if I was to search for products from any of those companies in the KnowledgeStorm directory, they weren’t included in the list because they weren’t KnowledgeStorm’s paying customers. This type of situation causes two levels of frustration for users, both because all the results that are displayed are commercial (paid) listings, and because this forces buyers to go elsewhere to find a complete list of CRM products when 85% of buyers want to find a one-stop shop for everything related to their purchase.

To overcome the buying process issues that both the search engines and limited product directories have, we built a vertical directory based on technology product categories. This vertical directory included every bit of information that Ziff Davis had about each of those categories – editor reviews, articles, news, user ratings, etc. – combined with a comprehensive product directory and resource library with information from the IT vendors themselves, including white papers, videos, etc. By surrounding each technology category with all the relevant content in each category and a comprehensive product list, we allowed IT buyers to be able to get a complete view into the product that they were attempting to buy.

In the State of Search report, nearly 25% of respondents said that they actually put off purchasing a car because they found the overall car-buying process too overwhelming or frustrating. Autobytel built a vertical directory to try to solve those issues, and I think that they might have hit on a viable solution if they are able to execute.

~ Black & White ~

What's next for Internet advertising

Thursday, October 11th, 2007

Look into the futureGoogle revolutionized Internet advertising in 2000 when it launched AdWords and the pay-per-click (PPC) model. This program was ground-breaking not just because the small text ads that ran alongside Google search results were served up based on relevance, but also because, for the first time, marketers paid only for an action (a click on their ad) – they didn’t have to pay for the thousands of impressions that were not clicked. With AdWords, performance-based media was born.  

Once advertisers demonstrated that they were willing to pay for any click, it was a short leap to believe that they would be willing to pay even more to know exactly who it was that was clicking. Today, lead generation and pay-per-conversion models (Google calls this cost-per-action) have joined PPC as viable business models, providing even more information to marketers who are trying to reach their customers.

 

Lead generation and cost-per-action pricing models are already popular in the B2B world. In the IT market, for example, Web Buyer’s Guide, KnowledgeStorm and Bitpipe are providing lead generation services to the biggest technology companies, which pay anywhere from $20 to $120 per lead to reach the specific individuals that they think are most likely to buy their products.

The Internet advertising market is going to continuing to move from static advertising to performance-based media. According to the just-released IAB Internet Advertising Revenue Report, approximately 50% of 2007 second-quarter revenues were priced on a performance basis, up from 47% reported for the second quarter of 2006. Lead generation revenues accounted for 8% of the 2007 second-quarter revenues or $408 million, up from the 7% ($284 million) reported in the second quarter of 2006. Contrast those statistics with the fact that approximately 46% of 2007 second-quarter revenues were priced on a CPM or impression basis, down from 48% for the same period in 2006.

Performance-based media is the future. We have already seen the movement with traditional Web content. Blog content, podcasts and video are all moving toward incorporating PPC pricing models, as well. I think the next move for these newer content formats is lead generation and cost-per-action. Let’s take video as an example. Silicon Alley has a write up about how advertisers are starting to take video more seriously, but that CPMs are declining. There is a debate going on around how money is going to be made on video advertising – what kind of ads will be used, the length, the format, etc. Applying the move toward performance-based media, I believe that someone is going to develop a lead generation engine around online video that will provide advertisers not only with the information on what videos were watched and how many times, but by whom and what their demographics are. Web Buyer’s Guide has a product on the market that does this, and I think it’s just a matter of time until one of the major video providers offers this type of advertising package.

And looking even further down the road – what’s the next wave of performance-based media? Right now companies pay for leads, but what if in the future companies begin to pay only for customer acquisition, and after an individual makes a purchase the lead provider gets a percentage. A large percentage. Sound like the affiliate programs that are widespread in the consumer market? Sort-of. But what happens when the technology is developed for a video provider to track an individual from the first video that they watch that peaks their interest in a product, all the way to the buy, and the video provider gets a portion of the sale?

Now that’s performance-based media worth talking about.

Disclosure: I used to work for Web Buyer’s Guide.

 

~ Foggy Autumn ~