Teaching the Old DM Dog a New Online Trick

The online world tends to get caught up in online ad spend reporting. In the first half of this year, Internet ad revenues hit a record $7.9 billion, rising 37 percent over the same period a year ago, according to the Internet Advertising Bureau (IAB). I particularly get caught up in the lead-generation/referral piece of the pie: $250 million two years ago to $750 million last year, to $590 million for just the first six months of this year.

What gets lost among these numbers is that online lead generation should be considered in much the same mindset as offline direct marketing (DM). The fact leads are collected online is more a byproduct than anything else.

I just got back from the Direct Marketing Association (DMA) show in San Francisco. The “interactive pavilion” was in a different building than the “multichannel/traditional direct marketers.” Foot traffic was exponentially lower in the interactive section (I was irked because our booth was over there).

How do you differentiate between interactive and traditional? It’s obvious how online lead generation differs from a mail insert. But why is the company that may use online to generate a lead for BMG in a completely different section than the company that uses an insert to generate that same lead? Although the two companies use different methodologies, they achieve the same ends as far as BMG is concerned.

Both my company and with the Online Lead Generation Association (OLGA) like to group online lead generation with the traditional, $50 billion direct marketing world. Not only is that a much more attractive overall universe to target, but if there’s anything about online advertising a traditional direct marketer can understand, it’s lead generation.

Take a guy who owns five pizza shops. Give him $5,000 and tell him to go bid on search engine keywords and he’d look at you as if you had two heads. Tell him instead he’s going to get $5,000 worth of names, e-mail addresses, physical addresses, and phone numbers from real people who voluntarily signed up for more information about his pizza menu. Think he’d know what to do with that information? Maybe not the e-mail addresses or phone numbers, but he’d certainly know how to drop a coupon in the mail to each person. The owner of the used-car lot next door to the pizza joint would have no problem using those phone numbers.

A common misconception of online lead generation is that leads can only be utilized only for online marketing. Fortunately, some of the world’s biggest marketers have already figured out that leads generated online are quite effective for direct mail, telemarketing, data mining, and other direct-marketing initiatives, not to mention consumer research that can be conducted more quickly online than off-. One packaged-goods giant entices opt-in consumers to complete brief surveys. A major cruise ship line relays online leads to call centers, which in turn call cruise prospects.

The road to understanding the convergence of on- and offline marketing is widest when it comes to lead generation. The fact most online companies would be split into their own universe, literally placed on the fringes of the main exhibit hall, at a direct marketing show boggles the imagination. There’s still a long way to go in educating not only consumers and advertisers but also the powers that be.

Vote for your favorite product or campaign for the 2006 ClickZ Marketing Excellence Awards, October 30 through close of business (5 pm EST) on November 8. Winners will be announced on November 13.

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