Lead Generation Blog

We broke ground this week on our newest project here at Precision Prospects: The Lab, a flexible landing page delivery system that utilizes multivariate testing methods to provide us with the data needed to enhance our landing page conversion rates. When we were first brainstorming this project, we just envisioned a simple A/B Testing scenario but then we started thinking big — Instead of merely testing two different options, why not test thousands at a time? Of course this option would take a little more work, but we concluded that the resulting data would be worth the effort.

So the basic function of The Lab becomes the delivery of dynamic landing pages, each having a given number of variables (x), and each variable having a given number of possibilities (y). The result will be that we will, in effect, have x^y different landing pages. That number can get pretty big in a hurry. For example, if we test 5 variables with 5 options each, we’ll have 3,125 possible landing pages. That’s far too many to analyze as separate entities so we will instead be looking for trends that hold true across different pages. For example, if x is set to a, the page performs better than when x is set to b. We can take this even further and learn how different variables affect conversion across multiple campaigns.

Where this gets interesting is from the design standpoint. Traditionally, designers have tinkered away at our landing pages playing with this and that until the whole thing looks perfect. But when you’re talking about thousands of different pages, that becomes impossible. Some of the random combinations (maybe even many of the random combinations) might look bad. What is going to be the cost of losing that “human element” in the design of a perfect landing page? To be honest with you, we don’t know yet. That’s the scary part. We’re definitely going to keep an eye out for any particularly poor performing variable possibilities and remove them from the rotation as soon as possible. The other thing we are going to do is to start small. Instead of throwing a bunch of hugely different variables into the mix right of the bat, we’re going to start with a few minor adjustments to a standard landing page.

So, why go through all this work? Because, at the end of the day, what’s important isn’t how good our design team feels about the landing pages, but instead, how well our landing pages are converting. With The Lab’s multivariate testing methods, we are going to take the control away from the designers and give it to the potential leads because they’re the ones who really count.

Adam and I just got back from Ad Tech 2008 in San Fran. I feel like our trip was a great success. One thing to I learned about lead generation is that e-mail performance marketing has been shoved under the bus by new targeting and optimizing technology. Advertisers have been avoiding this marketing tool because they are more interested in the new lead generation technology on the market. We can’t forget to stick to the basics. At the end of the day, it’s the simple things that tend to perform better than the rest.

An observation about the Health Channel (my focus) — Exclusive health insurance and diabetic offers are hot right now. They are popping up left and right from various lead generation providers. Real time delivery is essential and standard for this consumer health based industry because it has a tremendous impact on conversion rates.

So what to make of this latest rush for bigger fish eating big fish or for that matter, Razorfish? For one thing, it means that the definitions of agency or media buying firm or media technology firm really don’t mean anything.

And conflict of interest is beginning to look quaint. Will agencies that own serving companies favor their clients? How can they not?

In the end, consolidation probably rationalizes the online ad market and brings better price/value to the advertiser. Certainly, banner ads will be more cost-effective as will search. And acquisition of Right Media and others means that some form of rationalization is coming in the Cost per Lead space as well.

The question is whether the ever-larger players can really pull off a consultative sale, bringing the customization leads programs require to boost ROI. Just as in search, vertical knowledge commands a premium. Whatever the result, the advertiser will have more choice of lead provider and program – and the numbers will tell the story.

Double Click announced a bid-driven ad marketplace a few weeks ago. Today, Yahoo said it was buying the rest of Right Media. As we all know, Google in March revealed its commitment to an auction approach to Cost Per Action. Big players clearly see some value in bringing buyers and sellers together for online display ads. Is this the future?

I’d say it is at least part of the future for CPL and CPA. A successful exchange requires transparency and measurement standards. In the equities markets, the former means quarterly reports and10K’s, and the latter means agreement to evaluate stocks on earnings or revenue.

But in the world of performance advertising, there’s a real risk of “apples and oranges”. How can an exchange equate the value of a sale versus a newsletter sign-up versus a webinar attendee? It will be fascinating to see how these exchanges approach the multitude of possible actions. In the meantime, there’s real value in standardizing programs for niche advertiser needs. I’d appreciate any thoughts on how the evolution to exchanges might happen.

Much was made of Google’s recent announcement that they’d be introducing an auction-based cost-per-action business model (in fact – I made much of it myself over at MediaPost’s Performance Insider (reg req’d). Most of the coverage I’ve read tends to be centered on how Google is yet again bringing new innovations to the marketplace. If only that were true. Cost-per-action is not new.

Indeed, it is a proven part of the advertising arsenal, getting its own line in more and more marketers’ budgets. So if cost-per-action is not new, is there anything notable in Google’s announcement? Yes and no.

While Google may not being breaking any new ground, they are speeding cost-per-action to the forefront in the online advertising space. For that we should all be grateful. However, I think the most interesting part of Google’s plan is also the least clear – how the heck will the auction work?

An auction for keywords is simple to follow. A keyword is a commodity, after all, and commodities are easy to price and bid for.

An “action” is something else entirely. It’s just hard to see how it all will work.

Let’s assume there are two companies, A and B, and both are trying to fill up a seminar. Company A uses seminars to sell $5,000 training courses, while Company B uses seminars to get leads for mortgage origination, for which it receives $200 per mortgage. These companies would no doubt value seminars differently. How are they to be equals in a bidding process?

And let’s assume the action is something more in line with the common perception of cost-per-action – a sale of a product or service. How will Google know what was sold? The honor system? Will it require that they somehow get integrated into a company’s back-office financial software?

And what about fraud? For an enterprising – if unethical – individual, making a little extra on the side will be pretty easy

Let’s assume Jimmy the college student is excited because Spring Break is about to arrive, and he has a big blow-out to Mexico planned with 10 fraternity brothers. Jimmy has built a pretty successful blog about college sports and his school’s Greek community.

Google introduces Jimmy to its cost-per-action program, and, strapped for cash before the big Spring Break trip, he has an ethical lapse. He sets up his blog to begin posting a student loan ad that brings with it a $50 action for every sign-up to attend a seminar. Seeing some easy money, Jimmy encourages his fraternity brothers to respond to the ad, and before you know it, they’ve “raised” enough money to cover their beer tab, and the student loan company gets nothing but a bill.

A larger fraud would likely get the attention of Google’s click fraud police, but something like this is likely too small to be noticed, and very likely too small to be addressed.

In the end – a big thank you to Google for bringing the next generation of performance advertising to the forefront. But please Google – make it more clear how the whole thing works, and how you’ll prevent click fraud.

I should note that I have nothing against Google – so if a Googler reads this and finds my wonderings unnecessary, please reply.

What does the firing of Don Imus for inappropriate remarks have to do with performance advertising?  Look at it this way: Cost per Lead and other performance programs are about choice or opt-in.  Traditional media are not.

In the Imus debacle, the sages of MSNBC and CBS made choices for consumers – without really consulting them.  A few advertisers bail out.  A few hypocritical leaders express outrage.  And the corporate decision-makers capitulate.  In the Imus mess, a legacy of good works – including skewering the hypocrites – is tarnished.

This is not democracy.  Consumers (listeners and viewers) had no vote.  Decisions were imposed upon them by advertisers and broadcasters.  Perhaps the good news is that this is probably the end of an era.  As online media and performance advertising grow, advertisers will need to listen to the voice of the consumer to build loyalty and business and stop running for cover.   People can opt-in or out for offensive speech or political clarity – and they’ll appreciate advertisers that don’t make decisions for them.

Wanted to make sure that everyone read last week’s post by Gary on MediaPost’s Performance Insider.  Here is an excerpt:

….To get out ahead of the Google juggernaut — or to enhance the performance-based ads you’re already running — here are six steps to getting the most out of a cost-per-action program:

1. Demand accountability now from your marketing spending — even your traditional media advertising.
2. Define marketing victory and focus all your media to working toward this goal. Is it immediate sales? Building relationships with target consumers? Educating consumers? Growing ROI?

Read more at:

Media Post Performance Insider Blog
Posted April 5th, 2007 by Gary Kreissman

Google’s CPA (Cost Per Action) announcement has sent some shock waves beyond the competition.  Many agencies – interactive, general, search or direct – have been muttering “What do we do when our clients ask us about THIS?”

I grew up in the agency business – as a mere lad, I was initiated into the joys of developing newspaper coupons and competitive analyses for Maxwell House Instant Coffee.  One of the highlights was working with the great Margaret Hamilton who had morphed from Wicked Witch to country store proprietress, Cora the coffee lady.  But I digress…

I did learn one of the great secrets of agencies back then: too many established agencies become conservative, reactive organizations.  The maverick agencies that seem to come out of nowhere are not just the hot creative shops.  Often, these are the agencies that get ahead of the curve on new executional or media ideas and show their clients how to leverage these ideas to accelerate growth.

Of course, no one would consider lead generation a new idea.  But we’re beginning to see savvy agencies adopt the online version of qualified leads as the solution to venerable problem of identifying and selling new customers for niche products cost-effectively. 

It makes sense for agencies to learn how to use CPL techniques – not only to add billings but to preserve them.  Many agencies saw a budget drain when performance advertising emerged in the form of Cost per Click.  Considering how CPL often delivers higher ROI, this budget drain might well grow.  CPL and qualified lead development in particular is deceptively simple.  Getting in the game is easy – making money isn’t.  Solution: Agencies need to tap the firms that have been learning their way through this for years. 

Oh, and in case any agency wants to talk to one of those firms - our number is listed!

This is the 3rd (or perhaps the 4th) time that Google has announced a foray into the CPA business.  Is this a good thing – for the marketer? The firms already in CPA, CPL or CPQ? What about the consumer?

I believe all these constituencies should welcome Google.  First, it is inevitable that marketers will see the ROI benefits – and shift budget – when they can decide to pay for sales, leads or other action.  Google’s presence will accelerate the acceptance of this thinking.  It will also set the pricing standards.  And marketers will gain as click fraud withers.

For Precision Prospects and others that have been in CPL/CPQ, one of the biggest challenges has been finding the people in client companies and agencies who truly embrace the ROI-based thinking.  When Google promotes an idea, everyone needs to pay attention – that will help those of us in niche areas expand our markets.

And for the consumer, Google and others will bring quid pro quo to life.  The more consumers understand that they can trade their valuable information for marketers’ information, the better potential relationships become.  Opting in can become a standard. 

Bring it on, Google…

Resources:
Google’s Smart Moves 
MediaPost
by Dave Morgan, Thursday, Mar 22, 2007

Ah Spring, when one’s fancy turns to thoughts of fantasy… baseball, that is.  I’ve had a fantasy (aka Rotisserie) team for many years.  We were even league champs one year.

If you’ve never played fantasy baseball, it works like this.  You hold a draft to bid on a group of major league players who you think in combination will lead the league in 10 hitting and pitching categories. You’re competing against other teams to select the best mix of players.  The standings depend on how your group of players does in those categories compared to the other teams.

This morning, I was working on my draft lists for the coming season and it occurred to me that the qualified lead development process is pretty much the same thing.  You decide on characteristics of the players you want (screening) to create a winning team (more business).  You bid against the other teams (market share).  You monitor the standings (conversion).

The big difference of course is that “drafting” qualified prospects equals real business growth.  Nice when fantasies become reality…