Lead Generation

Effective online marketing can be a daunting task for many businesses. If not done right, the return on investment could easily be little or nothing. As with any marketing effort, the ultimate goal is attracting new business. When marketing is focused on lead generation, the return on investment becomes obvious. Like SEO, the objective is attracting the right audience - people interested or in need of your product or service - and then capturing their information for immediate or future follow up.

How do you get someone to pony up their information? You offer something of value in exchange. Many companies I work with develop white papers, case studies or webinars. In order to view the information you have to register first. I'm sure people know what they're getting in to, so the offer must be worth it to them. Therefore the offer is critical.

The offer might even affect your ability to buy the right type of campaign. As competition for ad dollars intensifies, the power is gradually moving back toward the advertiser. A trend toward lead generation is beginning to take hold as advertisers demand it. For example, Google Analytics measures the effectiveness of an online advertising campaign from the click through an online transaction and reports the results in terms of cost per conversion or cost per sale. Savvy advertising agencies want to buy online media based on cost-per-action instead of cost per impression or click. This has resulted in an increasing ability for advertisers to pay for performance. However if the offer isn't compelling, many publishers will pass. You see, in order for a publisher to offer pay-for-performance campaigns (in whatever permutation that might be) they have to feel that the offer will convert. Otherwise they run the risk of having to burn through too much inventory in order to fulfill their commitment.

Consider a hypothetical site that has a large membership of golfers. Two advertisers approach them for a performance based campaign. The first a research firm, plans to promote a survey after which the golfer has the chance to win a new set of irons. The second is a manufacturer of heaters for golf carts. Their offer is for a 20% discount. Clearly the chance to win new irons appeals to almost any golfer and golf cart heaters have a narrow appeal, so the publisher would take less risk with the survey company's offer. Or the publisher might take both offers, but at different rates.

The cost of a lead will naturally vary from business to business. A few targeted advertising campaigns and some research can determine an average cost per lead for any business. The goal for the advertiser then becomes driving down the cost per lead without sacrificing quality. There are tons of online sources of leads. I once worked for a company that bought names and email addresses for $.04 each (in enormous volume). The quality of the leads was terrible - in that none had expressed a real interest in our product, but the low cost and high volume meant that we could follow up via email and enough would convert that we could still meet our cost per lead goals. Most businesses should use a more targeted approach to produce the best quality leads as possible.

Take a high tech company that develops a webinar on the cost savings associated with cloud computing. They promote it through various channels hoping to attract attendance from CIOs in large companies. The people who register and actually attend such a webinar are very likely hot leads. Some companies I work with are extremely happy if 10-20 people attend their webinars, even at a cost upward of $150 per attendee, because the leads are hot and one deal would equate to hundreds of thousands of dollars.

The key to lead generation is balancing all the factors to create a campaign that generates a significant volume of quality leads at the right cost. It can be done for any business willing to experiment and optimize over time.