Thursday, July 31, 2008

Performance Insider: A Pivotal Year In Online Lead Generation

A Pivotal Year In Online Lead Generation

LAST YEAR WILL LONG BE remembered as a pivotal one in the online lead generation category.

This spring marked the one-year anniversary of the FTC's wake-up call to the industry in the form of a formal investigation into the use of the word "free" in lead-gen ads. Although the investigation was limited to only a few players, the news had an immediate chilling effect that spread uncertainty across providers, publishers and advertisers alike. And it was later echoed by the Florida Attorney General's settlement with two companies over similar improper consumer disclosure practices. To put it plainly, with its practices and reputation called into question, online lead generation - a vehicle wholly dependent on consumer trust - was facing the most serious threat of its brief lifetime.

This piece, however, isn't really about the investigations or settlements per se; we all know they've received considerable media coverage and commentary over the last twelve or so months. Rather, the story I'm interested in telling is about how our industry united under these trying circumstances and took action to ensure the long-term viability of the online lead-gen category.

In fact, major players in the industry came together through the Interactive Advertising Bureau (IAB) and faced the crisis head-on, meeting first on a monthly basis and then weekly to the address the issues, hash out our differences and come up with rules everyone could agree to. Through a series of formal best practice documents we devised the following standards to make online lead generation as transparent as possible for advertisers, publishers and most importantly, consumers:

•Lead generation-focused Web sites and offers should clearly disclose how consumer's personally identifiable information will be collected, used, and shared. •Registration pages should clearly disclose what consumers have to do in order to receive a free gift or other incentive, as well as which offers are required and which are optional. •Offers should clearly disclose what consumers need to do to get something for free, and if consumers will be required to pay money as part of any offer. •List managers should clearly disclose if consumer email addresses will be shared with third parties.

This accomplishment was no small feat considering some players' revenues and margins may have been dampened after making these changes to their practices. However, the industry recognized the prevailing necessity to adopt these standards and keep our category healthy in the long run.

The year was notable for more than the industry's spirit of cooperation in problem-solving, -though; 2007 was also filled with innovation. Sophisticated players incorporated behavioral targeting into offer presentation, using basic demographic information, past behavior, and actual transaction data to create custom targeting and segmentation models that dramatically improve the relevancy of lead-gen offers shown to consumers. Video also made its way into lead-generation ads, providing a boost of brand emotion to the direct response vehicle to further engage consumers and motivate action. And so on.

All told, these changes have paid off:

Transparency to consumers is the order of the day. Confidence in the medium has been restored. Big brands are increasing participation. And, most telling, advertising spending within the lead generation category continued to grow at double-digit rates in 2007, with revenues having increased a robust 21% over the previous year according to the IAB/PwC 2007 Internet Advertising Report.

I'm proud to say we have accomplished a lot in the last year, under some decidedly difficult conditions. With online lead generation now poised for continued growth and success thanks to the combined efforts of the industry, I'm confident the best is yet to come.

Gayle Guzzardo is senior vice president, product management, at Q Interactive and the chair of the Lead Generation Committee of the Interactive Advertising Bureau. Reach her at

Performance Insider for Thursday, July 31, 2008:

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