Lead quality always drops, reviewing the classic UofP – Quinstreet issue

Update: John DeMayo, formerly of Advertising.com, has a good point in the comment section here….to which I’ve added a counterpoint. Thanks John

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The post on lead verification is focusing my thoughts on lead generation today. 

I’m not going to use the Quinstreet-University of Phoenix analogy here.

Actually, it tells a great story and its rather short. So I’ll use it. I think it was in 2005.

In bulletpointed fashion:

- Quinstreet drives leads to University of Phoenix to the tune of half of Quinstreet’s revenue.

- This is done through mostly affiliate search which bring quality leads to University of Phoenix at a respectable price.

- Quinstreet can’t figure out how to grow more profit with University of Phoenix so they acquire lower quality leads at a lower price from the distributors and blend these into University of Phoenix.

- Quinstreet grows the University of Phoenix relationship.

- University of Phoenix gets frustrated sends out RFP for new company to manage their lead distribution. That company becomes Advertising.com.

The problem with the lead gen world is one of real time profit and companies without secret sauce.

Lesson if you are using a new lead provider quality will always, always, always, be better in the beginning. Know your distributions; pay attention to their business goals and the challenges with their business. The only way a new lead gen company can really get the attention of a major advertiser or client is to drive them high quality leads.

Back to the metrics again, performance marketing is a relationship or index amongst the following factors: price, volume, quality, and volatility.

A new lead provider to a client (whether new or legacy) will be able to grow a relationship focusing, typically, on quality first. Why, let’s examine:

- Price: No way a leveraged lead buyer will pay top dollar for a new lead provider so that’s out

- Volume: Either the new lead provider is just growing their business (small volume) or needs to take the volume away from another partner, either way this typically does not happen in a day, week, or even month’s time.

Quality: Nothing like high quality leads. High quality leads are the safe harbor in any market. They convert and that keeps the business going, especially in a recession.

Volatility: What converts for one advertiser typically needs some massaging before converting for another. There always tweaks. Expect some volatility.

By the way, forward ahead to Q3 2007, University of Phoenix buys Aptimus to take their lead quality inhouse.

Lead verification: Tough one

Greg Yardley linked to this blog last week and he’s got some comments on lead verification on his blog: http://yardley.ca/2008/03/29/preventing-lead-tampering/

I thought I would augment his post.

Lead verification, the process of ascertaining with some confidence factor, that the information in a lead is accurate.

Most firms bundle lead verification in with a lead quality review (many major lead companies have whole department looking at lead quality).

However, the issue of lead quality is not one that can be solved at a service-based level. It’s sort of like the conundrum of Efficient Frontier, but I’ll leave that for another post.

To have an effective solution, I will review with the two classic product development questions:

- What’s my ROI?

- How much effort do I need to accomplish it?

Unfortunately, upon this calculation, any slew of offsite lead verifications just don’t work.

In terms of lead quality, Greg is on target that there are a number of other factors to consider with lead quality. This is: resubmission of a lead, resubmission of doctored lead, time sensitity of that lead (even within a daily segment).

Do any lead verifications solve all of these problems? No.

And therein lies the problem.

If no solution can solve 90% of the problem, now I am spending just too much cost to work with an outside service.

I need to: negotiate and sign a contract, integrate within their system, insure that I have support for when their system has releases, train my staff on using the data, etc. etc. Further, I have concerns about the company’s trajectory, i.e. does my competitor maybe buy them one day.

Integrations within the real time supply chain in lead generation (from distribution source through lead transmission) are just too difficult to manage.

Then again, if anyone does have a great solution, maybe I’ll reconsider, but only after some other company works out the bugs.

Glam Media: I’ll just link to it

Awesome post by Michael Arrington at Tech Crunch on Glam Media:

http://www.techcrunch.com/2008/03/29/glam-makes-big-cuts-in-publisher-payments-up-to-80-drop-in-revenue/

How the saga on Glam Media plays out will be really telling to see how far the online media industry has come in terms of ethics, media analysis and agencies growing up.

Here’s hoping that publishers have not bet their scalability and production costs on Glam or that agencies understand and can explain the value of impressions that are served on Glam.

If not, let’s hope we’re not doomed for another eFront Media. Read the post if you haven’t had a shot.

Ha, my online EDU business is doing great also!

Quick blurb here, especially to any investors out there:

“Everyone’s online EDU business is doing great.”

I can’t tell you how many times I’ve heard from any number of companies that their EDU customer acquisition is doing well. My response, “why?”

Listen carefully to the response and you’ll find whether a company understands the macroeconomics of their business at all.

With the tons of inventory from push media (display, co-reg, email) still depressed from the lack of mortgage ads, guess where the subprime yield comes from EDU. My guess is as the EDU markets slows a bit towards the end of this year, the insurance folks will get some of the spillover.

Friendfeed: Will it become the Dogpile of social networks

A lot of press these days in terms of aggregating friend feeds. If you are a member of the Friendfeed bandwagon in Silicon Valley, people regard you as smart. Actually, I don’t know if that is true.

Here’s my question — does anyone see the parallel to Dogpile or is it just me?

I’m not a user of Friendfeed, but I will probably check it out. But again, the issue is around integrations.

As the number of integrations scale around social media, can Friendfeed manage this effectively when parallel services can or will exist at some of the larger social networks.

Before everyone jumps on the Friendfeed bandwagon. Let’s just review some numbers:

Dogpile: 3.2M uniques per month in the U.S.

Google: 123M uniques per month in the U.S.

Friendfeed will appeal to a certain early adopter marketplace. I believe after this marketplace is reached their growth will be capped. 

And one more thing here, it would be real great is some of the journalists, bloggers, and investors that buy into these things did a little research in middle america. I really would be curious to see who is Twittering in St. Louis these days.

Customer service is the new marketing

With the advent of the internet as a medium and purchase location, has come the advent of customer service as perhaps the most meaningful component of your online marketing plan. Yes, online marketing plan.

Agencies everywhere are cringing at this notion. Won’t a fancy campaign work. Sure a fancy campaign will work — that might help create brand awareness or even brand “illusion.” But if you’re message speaks to anything involving a service or product (so I’m excluding media marketing here–band,etc.), then you better back that up on your Web site.

The Web site of a brand has created the intersection of a few things to poise customer service as a springboard of effective brand presence:

1) The web site is always up: I can always visit it for information, an FAQ, or troubleshooting. Will my child be allergic to this product? Are batteries included? What are the details of the sale?

2) It’s exceedingly easier to communicate en masse or per individual online

3) Real time feedback

Want to learn about why your customers aren’t buying your product, ask them! Want to know what three components to vary in your multivariate test, get some feedback. Want to help prioritize which features you should be in your next rollout, take a poll.

Mind you, this feedback needs to be carefully sorted and marketed around. Engage your customers in terms of useful feature sets and major news, not around, “should the site have a blue background?”

With initiation of a conversation with your audience, this provides real feedback from real people and perhaps more importantly invests those same people in the brand. eBay did this the toon of a top 5 company. Sure their sellers are not always happy with every decision, but they feel heard and a part of the success or failures.

In the age of choice online, making customer service extremely personable should be a first step in product development and should be integrated into a marketing plan. You and I as online marketers can always look at all the data in the world. We can investigate which profile of users from what distribution point are dropping of the site. But we can also do more than just theorize on why people are doing this; we can do more than investigate the value propositions on the sites they exited to.

We can ask them. And engaged consumers are usually eager to share. Engaged customers adopt a brand and increase brand value.

If you’re agency doesn’t have a strategy here, I would encourage you to push them on it.

More feedback on powerTV, please add some more comments

Seems my hastily reviewed blurb on powerTV should have commanded a more thorough review. http://overpricedad.wordpress.com/2008/03/26/powertv-and-gm-a-belated-nice-job/

After reading through more commentary on this “story” and looking at the comment on the story, it begs the question:

- how do you measure if the marketing tactic you did just used helped or hurt your brand in general (i.e. how do you measure the feedback) and what are tactics to address this once it is identified. The world of “no comments” went out the door the day the Google’s, WordPress’s and Digg’s of the world commanded media attention.

I’m going to spend some time today and this week inventorying more comments on this story before pronouncing judgment on this campaign.

One thing that is apparent about the campaign is the lack of response to comments by readers to powerTV and GM  about this in an obvious and promoted way.  A campaign is something that needs to be evaluated and addressed much more after it’s run.

And I have not done my homework so I’ll resolve further judgment here.

One pet peeve powerTV. Assuming I have your web site right at: www.powertvonline.com, always always stand behind what you do if you believe in it. The fact that I can’t go to your web site and it is not transparent and obvious who your management team is from it begs reconsideration. In the age of Google, all I needed was one more click (by the way, maybe this will change but these are the current market conditions.)

More on this and a separate post later this week on how quality customer service and media review is the new p.r.

Solve this challenge: You’ll make consumers, branders, Jeremy Liew and Ari happy

….and maybe make some money.

I haven’t had a chance to comment on the great post from a few weeks ago by Ari Rosenberg: http://blogs.mediapost.com/online_publishing_insider/?p=140

His writing is some of the most on target and entertaining in the space for sure.

And the title of this one is no exception: Did You Go to the University of Phoenix?

Ari, of course, in this post references the ability for University of Phoenix to build both brand and ROI online at bottom rate prices. Why? Because publishers are looking for the nearest dollar and willing to compromise inventory supply.

An interesting aside here though is the proliferation of brand marketers adapting to the current market conditions and adopting this strategy: Verizon and AT&T running banners on conversion metrics.

Even Arm & Hammer. 

There on the redesigned front page of Yahoo there was a discount coupon from Arm & Hammer as measurement of the success of their home page buy. (By the way, I’m not suggesting that Arm & Hammer told Yahoo that “listen, I’ll pay you $25 for each discount coupon that gets downloaded today instead of an upfront in the hundred thousand range, I’m merely suggesting they have a way of measuring the success of their buy to push down pricing on further media campaigns).

Anyway….back to the topic and apologies for the meandering.

Ari is certainly right in terms of dissecting the value of inventory and coming up with the occam’s razor solution to this one: limit ad placements. There are many reasons discussed on this blog and on the comment board on Ari’s that took about the challenges in making this happen: performance marketing propping up smaller pubs, the inability to police ad placement across the long tail.

A solution that’s been bantered about a bit (I found older comment on it here: http://www.clickz.com/showPage.html?page=3605091) in many forums is in terms of page layout.

Let me bring in the converse of this from a post by phenomenally sharp-honestly one of the sharpest on Sand Hill–investor Jeremy Liew. He suggests a standard ad unit for social media.

What in the 728*90 (gosh, that’s terrible) do these two points have in common: page layout in variation and standardization of ad units for social media have in common? User fatigue.

The web has certainly seen the explosion of content and more recently the possibility of quick riches from online publishing. Because of the relative cheap cost of production, the ability to widely distribute (by users through email, or search engine through indexing or seo), the web has also seen, in some respects, the denigration of content. Regardless of whether it is UGC or other, the production value of the content of the web is usually below its visual counterparts on TV.

By standardizing and structuring a web publication within itself and within the web, there are no disadvantages for the web publisher. Standardization allows for:

- ease of navigation by the user

- ease of display of a advertisements that are in and of themselves standardized

- ease of distribution by search engines and link exchanges which gains more traffic.

All these factors have contributed to create order of information in many cases, but a lack of creativity that, in this writer’s mind, can lead to reduced quality.

The answer is not standardization of ad units to push social media as Jeremy suggests (that will only seek to diminish the value of the ad unit in a space that is much closer to communcation on communication – content bar), but it’s not revolving page layout either (that will only seek to frustrate the user). It’s something in between.

Solve this through a content management platform and that’s a valuable company.

Ironically a company doing a great job of this is none other than ESPN.com– as continual changes in format, repackaging and promotions seek to keep the user interested without frustrating them.

And Looksmart didn’t see it coming either, app developers?

Let’s be honest Looksmart saw it coming. 

Everytime I see a successful application on Facebook, I’m hoping that two developers in the garage are making enough money off that app right now.

Own the user, own the data, and own their origin point. If you don’t do this, you’re dead. Of course, these words are far from new.

What’s going to be interesting to see going forward is Facebook’s management of application growth in the wake of getting their app fund up and running and trying to justify their valuation.

Hopefully Facebook will reach very equitable deals with a multitude of developers and use their good faith to enlist an army of developers that generate the next products of value on Facebook.

Hopefully Facebook will not self select apps, products and verticals and in turn threaten the existence of the developers who have done the most to generate positive PR for Facebook than anything else in the last year.

As for the AppDevelopers, if you’re looking to build lasting value, your cross platform strategy should begin now. (And with developers behind Likeness and Zoosk you already see advertisements to engage on MySpace or to “see what MySpace users are doing…brilliant guys).

If not, be leery of merely being the next Looksmart and having the traffic dollar pipeline shut off.

ROI of the beholder who has the tools

Final post on this topic for now. 

With ESPN’s comments this week and continual blogosphere, promosphere (my word for “corporate blogs”) and rag coverage of the ongoing debate between brand marketing vs. direct marketing online, it’s time to come back to what marketing is supposed to be about: driving awareness through transaction for a specific product, client, or entity.

Ask any direct marketer and they’ll produce a thousand spreadsheets with tidbits of data (the reality is they only optimize on 5 or 10, but that’s another post).

Ask any brand marketer online and they’ll lead with “reach” and “frequency,” push them for an evaluation metric and 9 times out of 10 you’ll hear, “we’ll I kind of guage by the CTR.”

The reality if you look at macro trends is that this trend of “soft” metrics by brand marketers will continue for the foreseeable future (3 to 5 years), no matter who tells you about forthcoming accountability of media.

Let’s look at some macrofactors:

1) On the major media client side it’s the economy, specifically the weakening of the dollar. With the weakening of the dollar the majority of U.S. companies are looking overseas to improve their numbers. This is a much more manageable and balance portfolio approach to growth than trying to deconstruct media dollars. In short for a 5-year CEO, deconstructing the media problem is a plodding process that slows shows progress, not an immediate gold mine.

2) Agency heads older than 45 or so are going to have a hard time figuring out the accountability issue. Why? Well, one, they have only 10 years or so in their career to make their retirement and this accountability of media problem surely is going to take much longer. Two, there is a major technology investment in providing the systems and services to do this — that’s right hello agency balance sheet and hello agency staffing a discipline they have not really spent a ton of time on yet.

It’s going to take a sea change and some heavy lifting to really move the needle in the right direction. In the meantime, you are going to see the value still go to ad networks, like Glam, who are building up brand-nice inventory and numbers to make everyone look nice to the clients.

So folks say brand marketers are not accountable, that’s completely not true.

They are beholden to a set of tools, products and methodology that the pessimistic says is archaic and that the optimist says are now more possible than ever with the advent of internet marketing.

ROI for brand marketers is not an immediate conversion off a click; it’s using tools like BuzzLogic and others to assess brand awareness.

Bolt on tools at the campaign level ESPN and you’ll see your brand spend increase and increase accountably.