Lemon Law For Leads?

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lemonadestand.jpgAnyone who participates in online lead generation is left with one of two conclusions at the end of a campaign: there are either a disproportionate number of John Smiths at 123 Main Street (phone number 555-1212, email yomama@hotmail.com); or there’s no such thing as a set of “pure” leads. 

The latter, of course, is the truism: there is always whitewash in lead pools.  No matter the brand or offer, any lead generation campaign will include leads with false or incomplete information that ultimately leaves the lead un-actionable to the advertiser.  It’s an accepted and at times expensive cost of doing business in lead generation.

With this in mind, I was disappointed that the Interactive Advertising Bureau’s (IAB) latest report on lead generation –  “Online Lead Generation: B2C and B2B Best Practices for U.S. – based Advertisers and Publishers” – neglects to offer any meaningful guidance on this critical (albeit complicated) issue: the constitution of a valid and therefore billable lead. This latest white paper attempts to provide a baseline of “Dos and Don’ts” for lead buyers and sellers, encouraging both sides to adopt the IAB’s recommended policies as a step towards streamlining and regulating the industry. And while the IAB Committee has done an admirable job in its discussion of such matters as privacy, disclosures and overall consumer experience, I was surprised at this obvious absence.

To understand why this is an important oversight, we should look at the context of today’s lead generation economy, which is generally managed through a cost-per-lead currency.  Lead buyers typically pay a cost-per-lead rate for their leads, rather than the standard cost-per-thousand or cost-per-click models used in other online media.  That means lead buyers (advertisers) are purchasing a commodity (leads) from lead sellers (publishers). 

Those leads with false and incomplete information have no value to advertisers.  Yet there are publishers who charge for those leads because there’s no unifying, widely accepted principle that delineates a billable lead. 

What other multi-billion dollar industry fails to define its most basic deliverable?

Moving forward, the lead generation community needs to adopt standard guidelines for developing actionable leads. Let’s take a step back and look at an offline analogy such as cars.  When you buy a car, you should have a reasonable expectation that your car will run.  It’s the lemon law principle.  If your car functions as promised, you’re a happy customer; and if it breaks down when you drive off the lot, you return it (and probably find a car from another dealer).   Fundamentally, why should lead generation be any different?  Why should advertisers pay for leads they can’t contact?  That’s not the commodity they paid for. 

To be sure, there are immediate consequences for the publisher with the lemon law model.  Banished would be the “scrub rate” made popular by the co-registration industry, where publishers cap the amount of lead rejections from a client at a pre-defined ceiling.  Publishers would feel a greater burden to “weed out” leads with potentially incorrect information, likely through the use of internal filters or third-party data verification.  It would call into question how contactability is determined when the primary method of contact is email, which is infinitely more difficult to cleanse than address and phone records.  And it would bring the need of independent lead auditing to the industry as buyers and sellers find ways to trust each other’s contactability scores and the timeliness of buyer rejections. 

But imagine the benefits to advertisers, many of whom today view lead generation as the Web’s seedy underbelly.  No longer would the IAB have to place the burden on advertisers, as it does now, of securing reasonable lead buying terms from each publisher with each new campaign.  The adoption of a common platform would remove much of the inefficiencies of the lead buying process, not to mention the acrimony and distrust that accompanies paying for leads you can’t use.  

As lead generation grows, and as it welcomes a greater number of mature, Fortune 1000 brands, we should embrace the lemon law concept within our industry.  Let’s develop a singular definition of valid and billable leads that revolves around accuracy, completeness, timeliness and actionability.  It’s a logical and long-overdue next step the industry needs to confront.

8 COMMENTS

  1. I agree with the principle of this article. However, one of the main issues from the publisher side is the agency or client unwillingness to share conversion percentages or any back end metrics. Also in the real world you pay for what you get. A principle everybody should live their life by. If you will never get something for nothing in life. So when advertisers try and get small business credit card leads for $8 there is definitely going to be a lot of crap. There are two sides to all arguments, having been on both sides of this industry I understand the frustrations of all parties involved. I agree there definitely needs to be better defined rules regulations on what and actual lead is however, for this to happen advertisers and agencies are going to need share more information with the publishers.

  2. Well said Dave. This is a huge issue in our industry. It is amazing to see the different views by publishers about bad leads. Some say return everything thats bad and others say you have to eat the leads because thats part of the process. Why should an advertiser have to pay for a bad or fake lead?
    Part of this issue is the rising problem of fraudulently and falsely submitted leads. Kind of like click fraud. Leads with real people’s info but they did not submit the lead. These issues need to be addressed and until that point bad leads should abide by the Lemon Law.

  3. I could not agree more with this.

    At Matchpoint, a lead is not valid unless a consumer confirms their e-mail address. Every time a new consumer requests to be matched with businesses we verify whether or not the e-mail address that they provided is valid and belongs to them. We do this by sending them a confirmation e-mail with a link in it. It’s only after that confirmation link is clicked that the matching occurs – and a lead is generated.

    If you do not confirm the e-mail address and intent of the consumer, you get the results that you describe more often than not.

  4. II agree totally that is what gives the business a bad rap!

    at NicheMarketersNetwork.com we scrub all data and provide a call verification program for our clients as well as dedicated person to randomly review and read leads. This keeps it al on the up and up.

    We don’t get these complaints from clients

  5. You raise a very good point about the need to provide quality leads.

    To expand on Peter’s point, at Insight24, I think we take it a step further. Since we’re dealing with B2B leads, the quality of leads we provides relates directly to our credibility and value proposition.

    In addition to confirming emails, we don’t pass on any lead that is less than desirable, such as unverifiable business and missing phone number.

    In the end, if the quality of leads are higher, then the value of that lead will increase as well.

    Best,
    Cece

  6. Great article. We provide the platform (LinkTrust) for many online marketers to capture, track, validate and distribute leads in real-time. We employ several methods for our Partners to use which reduce fraud significantly. But, the bottom line is to never use a scrub rate in an IO, only work with reputable companies, and accept a small amount of volume on a trial basis to get started.

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