Back to School: Co-Reg 101

Now that all the kiddies are heading back to school (I’ll miss those three interns!), I thought I’d close this summer with a column that’s more educational than anything else. I’m so involved in online lead generation that I often forget a lot of very smart people don’t understand the differences in most of the forms of co-registration and lead generation.

Over the last month or so, I’ve been speaking with some of the smartest minds in technology. I’ve got news for anyone who wants to listen: co-registration/lead generation has a horrible reputation (I’ve heard “wild, wild West”, “murky,” “dark cloud,” “outright shady” — you get the picture). So how do you separate yourself from the reputation that follows the industry? It struck me as a good time to actually define the various forms of co-registration and lead generation.

So it’s off to school we go.

Let’s start with what should be understood as the purest form of co-registration. Co-registration happens when a user signs up for a particular Web site and enters a certain amount of information. The user is then provided with an offer or set of offers for products and services provided by that particular site or offers from third-party advertisers.

Now, there are a plethora of manners with which “pure” co-registration is done. This is where things can get nasty. First, the consumer can be just signing up for a site because he’s actually interested in the content provided by that site (what a novel idea!), and the site figures it can make some ancillary revenue by showing a few different types of advertising, one of which is lead-gen offers from third parties. The site could then get greedy and think, “Wait, if I precheck a box [creating an opt-out], trick the user, or force the user to see a lot more offers, I can make more money.” There are ramifications both in terms of quality of leads and user experience.

Now we turn our attention to all of the “lead generation” companies. What exactly are these? Is it some guy in his apartment on the Lower East Side of Manhattan who finds some deals on an affiliate network and brokers them out to unsuspecting sites? Is Advertising.com signing an exclusive deal with the University of Phoenix to legitimately run its online lead generation campaign? Is it a company that creates its own Web portals with incentives (free gas, free mortgage quote, etc.), then shows the consumer just a ton of offers? The goal is to pay, say, $1 for a user to go through a process and generate $2 per user? Whoa! Instant business (doing what, I’m not so sure). Is it a company that has a technology Web sites can use to serve offers and aggregates sites so advertisers can get leads?

The answer: all the above! Like the Internet as a whole, over time the “pure” brokers are slowly but surely fading away. Soon enough that guy in his apartment will be a non-issue. One of the best things about the Internet is it eventually cuts out needless middlemen who aren’t bringing real value to the table.

As for the companies with their own portals, they’re going stronger than ever. I hear a lot these days that this company or that “has an education portal.” What this means is XYZ Co. creates a Web site consumers can visit and register for online education offers (usually with some incentive tied to it). After consumers register, they’re shown a boatload of offers relevant to online education (some of these companies get greedy and proceed to trap the user in a maze of offers to make a little more loot, thus diluting quality). These are the companies everyone’s reading about getting all kinds of crazy dollars. Power to them. Done properly, they make a lot of money. Many are totally solid businesses, legit folks trying to provide high-quality leads for advertisers where there’s obviously huge demand.

For some, however, there’s a red flag. Some of these companies are competing with their own clients for media. An online education company gets leads by buying them from networks and having their own media people buying search or other media, for example. How do education portals generate consumer traffic? They have media people who buy search or other media to generate traffic — provider and client bidding against each other. A major online auction company forbids its affiliates from bidding on a huge list of keywords.

So, a bit of education as we close summer and get ready for the fall. Consumers, please get back online!