IAB Lays out Lead Quality Ranking System

Spending on online lead generation rose from $347 million to $592 million between the first half of 2005 and the same period in 2006, but that doesn’t mean it was all effective. Indeed, the organization that reported those numbers, the Interactive Advertising Bureau, recognizes growing interest in this very direct form of online advertising, and has suggested a step-by-step process for determining lead quality.

“The Marketer and Agency Guide to Lead Quality,” developed by the IAB’s Lead Generation Committee, offers a practical set of guidelines to assist advertisers in measuring lead quality, determining which leads to contact first, what sales approach to take and where to focus ad dollars, as well as to inform advertisers’ negotiations on setting lead prices.

“There are a lot of marketers that play a numbers game and try a lot of different [lead generation] sources, not putting any rhyme or reason to it,” said 24/7 RealMedia SVP North American Sales and Operations Ari Blumen, a Lead Generation Committee member. 24/7 RealMedia provides a variety of lead generation services including co-registration, e-mail, SEM and display ad serving for lead generation campaigns through its network.

Over the course of several months, members representing over 30 companies, including ad networks such as ValueClick and Advertising.com, publishers such as Cox Newspapers and MSN, and lead generation service providers like Innovation Ads and Q Interactive, met to develop a system for scoring lead quality based on five specific factors.

The process calls for marketers to determine Lead Origination, or the ad format used to capture user contact information, and Consumer Motivation, which deals with the reasons a user submitted personal data. Other elements to rank are Lead Exclusivity, or the number of advertisers the lead was sold to, and Lead Age, or how much time has passed since the lead information was gathered. Another significant element is the validity of the data provided by the user, known here as Verification of Data.

The next step is to attribute a rating to each of those five components. For instance, when it comes to ranking lead origin, information gathered on an opt-in basis is considered of higher value than info collected without opting in. In addition, the paper suggests leads collected when an incentive such as a sweepstakes entry is provided are actually of less value than leads submitted without a giveaway offer involved.

“With respect to publisher-based incentives, the committee generally felt that lead quality may be much lower on publisher sites that offered free gifts as incentives to consumers,” noted the paper. Committee members also agreed lead quality is diminished with each additional buyer, while leads garnered over six or seven days ago are deemed relatively worthless.

Although lead generation services often validate lead data through third parties that ensure names, addresses and phone numbers match, the committee stressed manual verification of every lead is ideal. A combination of manual and third party verification is the next best thing. Simply okaying postal and area codes, or removing duplicate leads doesn’t cut it, according to the paper.

Once the five elements of each lead are rated, the process requires marketers to determine the importance of each of those factors in relation to campaign objectives or advertiser verticals. For example, while data verification was considered most important for mortgage advertisers, those in healthcare, insurance and education should treat consumer motivation as of utmost significance.

The process “looks more complex in my opinion than it really is,” 24/7’s Blumen told ClickZ News. “Once you actually set up the metrics involved it’s actually a lot easier,” he added. “This is more to bring everything to apples to apples, and set a strategy moving forward.”