Some lead-generation and direct-response marketers using targeting techniques have already seen this nightmare come true as ClickZ has learned that Facebook has incorporated an evaluation program that will decline ads if they loosely include user profile attributes. If the targeting aspect isn’t deemed relevant to the actual product or service — DENIED.

The semi-automated, semi-human-operated (it’s a frakkin’ cylon!) process decides if an ad is legitimately targeted to a locality, gender or age demographic. Sound pretty arbitrary? Several marketers report are that their ads with profile-based copy have been rejected and that their click-through rates and conversions have nose-dived.

But the affected advertisers aren’t ready to whip out their pitchforks, light the torches and angrily march toward Castle von Facebook yet. Sure, they’re complaining, but there seems to be a general understanding that this is part of the site’s growing pains in accommodating both users and advertisers.

“We are not actually going to know the outcome to all of these policy shifts until they are done,” Oz Sultan, executive advisor for Perks Consulting, told ClickZ. “We are just kind of getting the ‘bear with us’ [talk] right now.”

The retailer tested two landing pages for its #1 keyword, “red jackets.” The first was a product list page featuring only red jackets; we’ll call this “The Red Page.” The second, “The Promo Page,” displayed an attractive young person modeling a jacket (not red), with a “Save $15 on orders over $100″ promotion.

The search engine marketing team alternated “The Red Page” and “The Promo Page” for all keywords in their Google “red jacket” campaign. Two weeks later, in an executive meeting, the search engine marketing manager boasted about the results.

“The Red Page proved to be the winner in our landing-page test with a 21% higher conversion rate than our Promo Page,” the manager said.

The announcement of the test results prompted smiles, “good jobs,” and other congratulatory verbal and non-verbal reactions by executives; none of whom fully realized they had just been duped by the misleading nature of the conversion rate.

Conversion rates are one of the most measured and optimized metrics in search marketing, and for good reason. A conversion rate is the percentage of visitors that result in a sale. So when a conversion rate improves, it is logical to assume that the ultimate metric, ROI, will also improve. Well, not so fast.

As a search engine marketing professional, I face situations like this all the time. Clients and other online marketers place too much emphasis on conversion rates when measuring performance. But conversion rates aren’t always king; king being defined as an “absolute ruler.” It is not absolutely guaranteed that one landing page, text ad, or other marketing component is performing better than another solely based on conversion rates.

While excited over the success of “The Red Page,” search engine marketer X neglected other factors that affect campaign success like traffic, revenue, average order value (AOV), earnings per click (EPC), and ROI.

Some visitors arrived on “The Red Page,” found a red jacket which retailed for $50, and went through the checkout process. Others landed on “The Promo Page,” found a red jacket for $50, and noticed the additional incentive, which offered $15 off of orders over $100.

The data below illustrates how other factors play a considerable role in search marketing performance. Had search engine marketer X considered more than conversion rates, the retailer would have maximized ROI and revenue.

Red Page: 2.3% Conversion Rate

Sales: 69
Revenue:$3,450
AOV: $50
EPC: $1.15
ROI: 2.3

Promo Page: 1.9% Conversion Rate

Sales: 57
Revenue: $4,845
AOV: $85
EPC: $1.62
ROI: 3.2

Lifetime value aside, the “Promo Page” is the true king in this test. If the retailer actually stopped testing the “Promo Page,” it would have forfeited $35 in AOV, $0.47 earnings per click, and a landing page that provided a 39% higher ROI. Not good at all.

Online marketers need to look at e-commerce conversion rates not as the sole performance indicator, but include it in a balanced scorecard that measures true online success.

The art of negotiation is what makes the advertising world go round. Media buyers want to the best results for their client and publishers want to give it to you: for the right price of course. Being able to find the solution that works for both sides takes testing and it takes negotiation. With that said, in the end your publisher wants your campaign to succeed because they value your business above all, and they want your renewal.

Great customer service is a hallmark of a great online publisher. To stand out among publishers in this complex online media world, advertiser and ad agency support needs to be a publisher’s number one priority, particularly after the insertion order is signed.

Publishers must be proactive to earn your business and to keep it, so don’t be afraid to ask for services that go above and beyond the standard campaign reporting and optimization tasks.

To get you started, I’ll let you in on a secret. Here are a few additional services you should know that most publishers will provide, if you ask:

1. Campaign impact research initiatives
Publishers will happily bear the cost of brand impact studies on their sites if they can share the results publicly.

2. Create a great case study
Publishers love a good case study, but advertisers aren’t always necessarily thrilled about informing competitors of their strategy. However, for some advertisers the reward can far outweigh the risk. Agencies can ask publishers to document a campaign’s success for their future new business efforts. Marketers get the free press. Think of the recruiting potential. It’s all good, and publishers are happy to do the work to make it happen.

3. Creative re-sizing
Ask a trusted publisher if they can help you re-size creative. You will be amazed how quickly the creative teams on the publisher side can turn these types of tasks around at no cost to you or your client.

4. Creative “localization” for geo-targeted campaigns
It is no secret creative tends to work better when it is customized to the user’s experience. Publishers have creative teams and dynamic localization technologies that you can, and should, take advantage of—it will save you and your client time and money.

5. Custom creative concepts
Publishers are always happy to create unique creative concepts for you or your clients. You’d be surprised by the great ideas that come from publishers, and they are more than happy to let you play the superstar. We won’t tell if you won’t.

6. Joint public relations and event hosting
Publishers have marketing budgets, too. If a campaign goes well, or a new targeting technology test yields good results, let the publisher pay for PR. The only thing we ask is that you let us put your name on it. Publishers promote their successes no matter what, so why not take advantage of the free publicity?

7. Industry insights and trends
If something is happening in our niche, in your industry, or in your client’s industry, we are happy to send you a note to keep you informed. We keep track of the news, helping you stay ahead of the trends. Sometimes your publisher has access to information and resources that you don’t.

Now that the cat is out of the bag, I trust you will take this info to heart and work your publishers for every last benefit you can. Just don’t tell anyone I spilled the beans! Seriously, I encourage media buyers and publishers to keep the dialogue going. The key to getting the most out of your relationship with your publisher is to ask. You may be surprised at the answer you receive.

On-demand lead verification for co-registration also corrects and adds missing information and can append demographics and lifestyle indicators. Such additional information benefits online lead generators by creating consumer profiles, allowing offers to be tailored to consumers, and eliminating the need for consumers to fill out lengthy registration forms.

“Companies that generate large amounts of leads don’t have time for any bottlenecks in their verification solutions,” said Dave Wengel, General Manager of Interactive Markets for TARGUSinfo. “On-Demand Lead Verification for co-registration provides companies with a simple, precise and cost-effective solution that can instantly determine the quality of a lead.”

So it only made sense for this latest installment of ADOTAS Conversations to pick the brain of a company that has parlayed its success as an online marketing agency to become a lead generation-focused entity.

In doing so, we spoke with Q Interactive CEO/President Matt Wise, who himself is a veteran entrepreneur and online marketing pro. Before joining Q in 2004, Wise most recently served as Senior Vice President of Account Services for Draft, a leading direct marketing and promotions agency in the United States. Wise had plenty to share on his company’s structure and advantages, as well as what’s lacking in the permission-based marketing field, and what Q is doing to change it.

Hi, Matt. So let’s start with your background and what lured you to Q Interactive and what your day to day is?

Prior to being at Q Interactive I was at Draft Worldwide, which is a direct marketing advertising agency. At the time, I think still currently, was the largest in the US, but prior to that I was at a number of other startups, a spin-off of IBM and a startup of official properties which eventually became Apartments.com. That’s really what gave me the foundation of wanting to come to Q Interactive.

I’ve been through four different startups of which, one way or another, successfully sold to other players. As a point of reference, they are all still in existence today. They all survived the bubble burst. But I took a couple years off of the Internet space, went into the agency space which gave me a, I call it, a reeducation and a heart for fundamental marketing—specifically direct marketing but also branding work. All of that brought me to a consensus that I prefer to be in the Internet space. I prefer to be on the operations side, but it’s not often in a career that you can take a couple of years off and get a “reeducation” shall we call it in a particular field.

So what initially attracted you to Q Interactive? What have you provided since your arrival?

When I wanted to reenter the space, I wanted to reenter in Chicago and in that list of companies in Chicago, Q Interactive at the time was called CoolSavings and they were a relatively one-dimensional company. But they had visions of rapidly expanding their business in a completely different dimension of an ad network, the lead generation.

So, that was about two years ago. We had launched our lead generation a couple of months before that. My first role coming here was to manage that from a business development side and work on our marketing industry communications. So what quickly became clear to me, was there was just tremendous potential in the way we were doing lead generation in a network perspective.

Our approach to it was substantially different than most of the other players, and there was a huge need in the marketplace to get permission from consumers to market to them. That’s essentially what we do and the way we do it is just a little different that other folks. But really that opportunity of adding up this portion of the business which I though had so much potential, was very attractive, and the folks here at Q Interactive are a great group of people, very sharp, very dedicated to the business. So it had the right culture, the right people, and the right business opportunity, which is 90% of what you’re looking for when you come to a company.

So I came here about two years ago, and really since then it has taken off. We were a public company back then that reported our earnings and I think in 2004, we can get these exact stats, we did about $38 million in revenue. Roughly breaking even, I think we did about a million or a million and a half.

In 2005, we went private at the end of the year, but we did $67 million in revenue and around $6 million in profit. So business truly just took off, and although we’re privately held now–our parent company took us private—,we’re seeing a similar growth trajectory in revenue that we saw from 2004- 2005, 2005-2006. As we look out at 2007, we’re seeing the same thing continuing. So, we’re definitely in a sector that’s growing well, and our approach to it has been very successful.

Why use the Internet for lead acquisition?

Three simple reasons make the Web an appropriate channel for database building: Cost efficiencies, targeting opportunities and real-time testing and optimization.

1. Cost efficiencies
For our pharmaceutical client, the cost efficiencies of using the internet compared to direct mail, contributed to the decision to use this channel as opposed to more traditional efforts. They estimated that the program would cost at least twice as much using traditional mail efforts, given production and fulfillment costs. Not only are production and fulfillment costs usually less online, but many of the tactics commonly used such as search and third party registration, only require payment when a lead is actually acquired, charging on a “cost-per-lead” basis.

2. Targeting opportunities
The opportunity to effectively and efficiently target makes the web a natural medium to use when companies are building a database of qualified customer names. Demographic targeting is the most obvious and simple targeting opportunity, which can be achieved through a series of appropriate profiling questions. The web will also allow geographic targeting. By working with appropriate partners, companies can go after customers in specific zip codes. In addition, the Web provides companies an opportunity to use “behavioral targeting” by partnering with third parties who track the visit and click paths of users to identify likely interests in products and services.

3. Real time testing and optimization opportunities
Real time program optimization was one of the bonuses that our pharmaceutical client realized with their online lead generation program. Initially, they started out trying to actively acquire leads through several different third-party partners. However, through weekly monitoring of the costs and quality of leads generated, they were able to optimize the program to include only the two most cost and time efficient vendors in a matter of weeks. Similarly, because the Web allows real-time testing, companies can test different creative elements quickly to identify the most effective and then easily apply that on a larger scale, without the time and effort often required for offline production.

When is the right time to execute?

To make sure you are actually ready to plan and implement an online lead generation program, it’s important to determine that you have 2 key elements in place: an appropriate offer of value to your intended target audience as well as an intention to follow through with the names you acquire. By motivating people to provide you with their information, you are setting expectations that they will receive valuable information or services from you. Nothing is worse for a business than letting customers down by failing to meet expectations.

That said the essential process that is being referred to here have been called pre-call planning, positioning, and prospecting; also called the three (3) P’s . Without the ability to invest sufficient time in pre-call planning, positioning, and prospecting effectively, you will have your chances for success neutralized at best and destroyed at worst.

P1= Pre-call planning involves customizing prospect activities to specific verticals and prospect types. You must learn key industry PAINS, not the features. These PAINS have to be linked to the prospects title and responsibilities, so your approach has a sense of urgency. It is the value your solution brings that creates interest on a cold call, not a product set of unique features, as promising as that sounds.

P2= Positioning involves being seen as an expert, a specialist, who can have a positive impact (create revenues: lower costs) on the prospect’s business and job responsibilities. Generalists cannot do this and the prospect rapidly will see that; especially in a crowded media field. By positioning your title, message, references, call to actions…in unison, you are a problem fixer. At best, you want to fix a problem that the prospect is not readily aware of, bringing to the surface a latent problem.

P3= Prospecting, the third in the process is simply picking up the phone. This means having goals, scripts, objection handling, call reluctance exercises, and eliminating distractions, so you can do what is not commonly enjoyed, often loathed, but critical to your success. The disciplined seller prospers most. If you lack it, seek out a coach, internal or external, to help stay focused and positive. Reward your self for a job well done each time you prospect.

According to recent Pew surveys, the number of online seniors jumped by 47% between 2000 and 2004. This means there are close to 8 million “silver surfers” at the age of 65 or older using the world wide web. About 58% of Americans age 50-64 say they’re hooked up to the net. 69% of wired baby boomers go online during your typical day, and that’s compared with only 56% of all internet users. So why are they online?

• To stay current with news and events
• To research health and medical information
• To stay in touch with family and friends
• To use e-mail
• To send online greeting cards
• To check on stocks and investments
• To research products or services to purchase offline
• To make online shopping purchases

That’s right—to make online shopping purchases. The 50 plus market has over $1.6 trillion in spending power and a net worth that’s nearly twice the U.S. average. In fact, baby boomers are the most affluent market there is. Those aged 50 or better are, and will become even more, a market, social and political force to be reckoned with and hence a very attractive community to a wide range of advertising and marketing sponsors.

With these powerful statistics, companies interested in targeting the baby boomer market must consider online lead generation. The real challenge is to position high-value products and services that match with the 50 plus market internet usage with your company’s sales and marketing process to generate the most qualified leads.

The most profitable online lead generation programs understand it’s a balancing act. Companies must realize they must strike the right balance between attracting interest and qualifying those baby boomer prospects who are most likely to purchase. If the process is too simple, you get an abundance of unqualified leads and an awful conversion rate. If the process is too difficult, the cost per lead will be prohibitive.

In our ongoing series of ADOTAS Conversations, we turn our attention to the affiliate marketing game and one of its top players, Jennine T. Rexon, President of Rex Direct Net — home of Rextopia and Rextrack products.

Since 2001, Rexon has taken a sizeable bite out of the affiliate and lead generation fields with her respective brands, and now she’s headed into new avenues with joint ventures and other projects. ADOTAS had the chance to sit down with the usually press-shy exec, and get her take on the past, present and future of online/affiliate marketing, as well as why she’d prefer to be known as the “Cinderella Woman”.

ADOTAS: So what do you guys do at Rex Direct Net, and what are you currently up to?

Jennine: We’ve been in business since 2001. Predominantly, our focus has been on affiliate marketing and lead-generation. Our affiliate marketing brand is Rextopia and our lead-generation services brand is Rextrack. That’s predominantly what we’ve been focusing on in the last four years.

The latest is that we’ve just formed a new joint venture company with Strategic Financial Publishing. Basically now, we will be more well rounded with not only representing products but owning them. Plus, we’ll have the in house capability to support more sophisticated technical requirements of our clients.

A: How did the name Rex develop?

J: I was in the living room one day and I said to my brother, “Hey, wouldn’t it be really funny if I had an affiliate network called Rextopia?” It was kind of one of those things. I don’t know where it actually came from, it just kind of came out. But in terms of the actual whole dinosaur theme, it comes from my name — my middle initial starts with a “T ” and my last name is “Rexon”.

A: Ahh, T. Rex?

J: Yes, so that’s where the whole dinosaur thing came from.

A: Now it all makes sense.

J: It was fun. And I think that the dinosaur is memorable as an icon, so I just kind of went with it.

A: So how did you actually get involved in the whole affiliate marketing/online marketing game?

J: My brother started in the business before I did, three years prior to myself. He was and still is very successful at it. I had a great job with PricewaterhouseCoopers as a management consultant, and loved what I did, but needed a change in lifestyle because I was starting a family and needed more flexibility. My brother suggested that he could teach me what I needed to know. Since there really weren’t books on internet marketing at the time, I took him up on it. Although I have to admit, I was skeptical at first. I couldn’t believe a guy that sat at home all day supposedly not doing much was making very much money, and I needed to support my family! Needless to say, I gave the marketing business a go and have become successful at it.

A: In terms of what you’re seeing in how the affiliate marketing game has changed and the online marketing game in general—what are some of the trends and challenges for your specific company and your specific industry? What are some of the hurdles to keep it evolving, basically?

J: Wow. It definitely has changed a lot in four years. We were one of the first direct-track clients. I’d say we were one of the first ten? Now there are over 150 networks like ours. There are a lot more choices for publishers than there used to be. I don’t like to think these networks as competition, but as choices. Publishers have a right to be choosy and particular. It keeps RexDirectNet on our game because it’s important to know what affiliates want and to meet their needs to keep them engaged as the industry changes.

Similarly, on the advertiser side, is real competition to get exclusive contracts for programs to keep your network unique. I think some of the challenges associated with that whole trend in the industry—from a publisher’s side—is that a lot of them are becoming really good shoppers, looking for the best rate on the deals they can get anywhere.

This puts a lot of pressure on networks to cut margins or come up with unique products to market. Another challenge on the advertiser’s side is that in my opinion some companies that are taking advantage of advertisers, not delivering what they promise. I think the basic [rule] is to know who your client is, and make sure they have expectations you can manage. Our industry is so fast-paced, you have to really be flexible: have a plan A, a plan B, and a plan C.

I watched Cinderalla Man last weekend—have you seen that movie?

A: It’s on my Netflix queue, I haven’t seen it yet.

J: You really need to see it, and maybe this won’t make much sense to you until you see it, but in that movie—I hope I’m not giving it away—it’s about a boxer before the Depression that’s really successful, and then during the Depression he suffers a lot of personal hardship as a result of the economy. And it fuels his desire to be successful when he gets a second chance. Even though he may not technically be the best boxer, his drive and motivation to win is so strong that he overcomes a lot of obstacles.

I think it really spoke to me, which is sort of how I feel about the business. I really have a real personal drive and desire for my company to be successful, and successful by my own measure, not by anybody else’s, and by my own standards, not by anybody else’s.

That’s why I can’t say there’s a lot of competition out there, because I really don’t see it as competition. The only competition I really see is myself and my company, and making it the best that it can be. Perhaps it’s a bit ignorant in terms of perspective, but I certainly am not ignorant when it comes to the business. My eyes are open and I’m looking around. But in terms of setting standards, I’m always measuring myself against how much better I and my business can be.

A: Yeah. Because then you get preoccupied with what the competition is doing, and you lose focus of what your standards are.

J: Absolutely. So, when you see Cinderella Man, think about this interview. I’d like to be thought of perhaps as the “Cinderella Woman! ” (laughs).

A: There you go. So what’s next for you guys? What’s coming up for Rextopia?

Well, with the combination of Strategic Financial Publishing, it will now give us the ability to build additional exclusive programs in-house as well as service new exclusive clients with products and services that we couldn’t offer them before. We now have technical staff in-house that can build web pages, that can build validations, increase our quality and increase the possibilities for growing our network.

I can’t disclose the details at this time, but in general terms, I’ve also hired someone full-time to work on the development of a new division of our company, which I can talk more about in about a month. We’re starting up a whole new—related— business that I actually worked on under RexDirectNet for about two years. I’m taking that chunk of work, branding it, and going to market.

I found a niche within Internet marketing that in my opinion has a very promising outlook, and I’m investing in it. So, in addition to starting our new company, we’re starting up a new division, and growing our Rextopia and Rextrack brands. All the while, I personally am managing our staff and clients—that’s probably enough to keep anyone busy — oh yeah, and being interviewed!

The enhancement, which Jumpstart will launch to its new car lead product next week, gives auto dealers the opportunity for a flat fee to have their dealership name and phone number locally targeted and highlighted on in-market car research sites like NADA Guides and Consumer Guide. Previously, only national advertisers were able to advertise in this space. Now with this deal the phone number will live on the pricing pages and will connect directly to the dealership. Additionally, emails will be sent to dealers for every phone call placed which will include name, phone number and time of call.

In a press statement, Jumpstart SVP of Dealer Sales Rob Bollinger says, “This is a great opportunity to capture potential customers who do not like to fill out e-mail leads. There are a large number of customers who prefer phone to e-mail. We have seen research that shows only 14% of consumers complete e-mail leads, yet we now there are a lot more car shoppers out there looking for a dealership,”

Bollinger adds, “These leads are expected to be of the highest quality since customers know exactly which dealer they are calling opposed to many e-mail leads that can come blindly through lead brokerage services. Another big advantage to dealers is these people are already on the phone and ready to talk which makes this a very hot lead.”

Also starting next week, Jumpstart will build a customized, searchable landing page for every dealer who signs onto its lead program for no charge to the dealership. Each landing page will feature the name of the dealership, an Internet Sales Manager name (if desired), sales phone number and a service phone number.