This past week, I spoke at the Return On Marketing Investment (ROMI) conference in Miami sponsored by the Institute for International Research. Given the topic and my role as chairman of the Online Lead Generation Association (OLGA), I discussed how online lead generation is a perfect fit for marketing ROI (define). There were people from all over the world in attendance, even a gent from Uganda.
Shortly into my presentation, I noticed about half of the audience had a deer-in-the-headlights look. Many international delegates had no idea what I was talking about. Needless to say, this made for some entertaining Q and A with some very nice folks from Asia (can you say “language barrier”?). Afterward, some colleagues said things like, “Oh no, you must have wanted to just get out of there!” and, “What a waste of time that must have been.” Actually, I had the opposite reaction. We aren’t even close to scratching the surface of lead generation’s potential yet. The opportunities out there are more immense than I ever imagined.
We do a significant amount of international business at my day job, but I still couldn’t believe how raw the international market is. It’s important to mention the audience didn’t comprised meatball representatives. I’m talking about a room of some pretty significant companies. My presentation, however unintentionally, helped me take a step back and walk through Online Lead Generation 101.
One challenge in understanding online lead gen is that, unlike other forms of online advertising, there’s almost no barrier to entry. Sure, it takes some level of knowledge, but think of it this way: John Smith briefly worked for a relatively large online media company and saw the different advertisers looking for leads or customers online and had kept records of them. He also attended a lot of the industry parties and trade shows (which are free for the most part) and managed to get names and business cards of quite a few industry people relatively quickly, admittedly not a difficult task.
After a while, John thinks, “Hey, a bunch of those contacts were looking to run any lead-generation offers for which I was looking for distribution. Why would I share that piece of the pie? I’ll just start my own company.” John gets a home office set up and starts calling the advertisers he knew from his previous job. He gets a couple of deals signed, then shoots out an e-mail: “Here are some offers for you to get leads at X price” and takes a cut. He gives his company a fancy name, East River Affiliate/Broker Network, “experts in lead generation.”
What value proposition does John bring to the table? Not a whole lot. Believe me, there are a ton of companies out there like John Smith’s. Some have even grown into pretty sizable organizations. Scenarios like this make sorting through online lead generation companies such a monumental task for advertisers.
If you look at all the advertising forms that have taken off, there are specific skill sets and technology involved: search, banner ads, behavioral marketing, and so on. You can’t just whip one of those puppies up in your apartment, add water, and, pow!, instant company. There’s work, money, expertise, and time involved. The companies in those sectors offer products and services that have taken a long time to develop.
A new research report from GP Bullhound predicts online lead gen will be a $1 billion global business this year. According to the report, “The lucrative nature of lead generation has seen a flood of providers entering the market, driving down prices and sometimes causing disturbance to the market as aggressive tactics are deployed by opportunistic vendors.” We need to ensure “aggressive” and “opportunistic” don’t translate into “dishonest.” Educating marketers in online lead gen is one way to achieve this.
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