When Will Lead Generation Have Its Turn?

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DM CONFIDENTIAL – It’s hard to believe that the first banner ad appeared on a site more than 15 years ago. There are some affiliates out there who haven’t been around that long. Since that first banner ad, though, there has sprouted an entirely new, multi-billion-dollar industry. It is an industry that has grown so fast it’s sometimes easy to forget what enabled it to grow so fast. As to those factors, that will sound to many like such an obvious question. Duh, some say. People started to build websites. Other people started to find those sites. More people built sites. More people went online and discovered those sites. Anywhere people spend their time, advertisers want to be, and after seeing that people really started spending time there, advertisers started feeling the pressure to be there. Question answered. Industry explained. Sounds about right. Is it?

We are not saying supply and demand doesn’t explain the growth in display advertising. It is necessary, but is it sufficient? If it were, then display might be as big as search, but it’s far from there. While we need supply and demand, we need something else: We need technology to connect the two together. That first banner ad might have been hard-coded, but can you imagine if every publisher had to write the code relating to the business rules and operations of banner advertising? Showing banners helps media sites monetize, but for a publisher to succeed, ad serving and ad optimization is not a competency they need in-house. It’s no different than finding a web host. It’s a business process that is the same across millions of sites and should not be a core competency of any. Just think of the performance marketing space. Networks today rarely have their own tracking platform. They know the tracking of clicks and conversions, the uploading of ads and the management of their advertisers and publishers are things everyone has to do. Writing their own code to do so will not make them more successful.

Great businesses have been, and will continue to be, built by recognizing the distinction between proprietary technology and technology that thousands, if not millions, of businesses will need, then being the one to provide it to them. And, as these areas mature, there are even more opportunities for further sub-specialization. We see it in display; we see it in performance marketing, from network software to reg paths. Are there any areas where we should have seen it but haven’t? We’d argue that there is a huge area of opportunity that has yet to fully be served – lead generation. It’s a big business, but it’s a business that should be much bigger. Think about the CPA network space. Once the off the shelf technology for running networks caught up, if not eclipsed, what a company could do themselves, the business exploded. Third party networks flourished and advertisers who wanted to run their own network flourished. That is not quite the case in lead generation, and the more conversations we have with startups, the more we realize this to be the case. Unlike banner ads or even network software, lead gen is hard, because it combines the most difficult elements of them all.

In the lead gen world today, there is software that will enable some of what the next generation need but not all of it. Let’s look at what you can do today. Let’s say you want to run an insurance offer. You have a handful of buyers, each with different criteria for what they will buy. This is already a complex problem. If insurance were the only vertical, it might not be, but each vertical has its own data requirements, and many times intra-vertical data requirements differ. One lead buyer might want different fields than another. Two might have the same fields, but accept different criteria from those fields (age, location, etc.). Just imagine writing the software that makes it easy for non-technical people to do this. Unlike banners, CPA networks and co-reg, the business rules of lead generation are not uniform. It’s a huge challenge and a huge opportunity.

What brought us yet again to this line of thinking was a conversation we had with a startup in the education space. They’ve watched what has happened in the space and wanted to try to radically change it. Well, radically change is a little too strong. They wanted to build a radically different education business. In order for them to run their business, they needed software that could do certain things. They definitely had buyers. They wanted those buyers to have a self-service interface where they could set up their campaigns and designate criteria, budgets and other parameters. They also need a tracking interface, so when they receive organic traffic or buy paid traffic from a number of sources, they can figure out correct attribution. Add to that a publisher interface, so if they have publishing partners, they too have a self-service platform that offers creatives, reports, payouts and so on.

In lead gen, there are platforms that can help an aspiring lead gen network in one vertical to sell leads to multiple buyers and deliver those leads in the manner they need. There isn’t one that also makes it easy for those buyers to have their own self-service accounts and change parameters as they see fit and propagate those changes down stream to the publishers. There also isn’t a platform that has similar features for publishers of all shapes and sizes, including the company itself that will be the first publisher and will need to track its performance.

There also isn’t a platform that offers these things and can meet the weird rules certain verticals demand, such as the auto insurance world’s need for being able to test a lead before either accepting or handing back to the ping tree. As we said, it’s not an easy solution. A handful of companies have come close, but instead of being the arms dealer to the industry, they wanted to be a specific country. We can only hope that one of them decides to become the arms dealer or that a new supplier will emerge as we have billions of dollars of unlocked potential if only those with the relationships had the tools to monetize them.

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