The face of lead generation is changing, in my opinion. Now, I guess at face value that is pretty obvious statement, but I think it is becoming a little clearer on how it is changing.

I hesitate to make a big deal out of this, but I think it is worth a post that simply notices that the change is happening. Years ago we discussed how the lead generation process needed to change and how the consumer needed to be better educated throughout the process. We also pondered how that would happen. The obvious statements were made that more content needed to be available to the consumer, but many of us could never precisely define how the process should change any further then that. The emergence of Mint.com, BillShrink, Comparison Ads, and many others gave more insight into how that content would be defined. These sites showed us that the content that we claimed the user needed did not specifically need to be paragraphs of written words, but rather personal financial content and recommendations. These sites created tools for the consumer to use and to interpret their own financial content and then recommend money saving products and services.

It was clear that these sites had amazing stickiness and consumers, regardless of security concerns, gave them enormous amounts of trust. This trust was being banked by the sites up until recently.

I frequently receive Mint.com emails and updates because of my activity on the site, however I believe this is the first time they have offered me anything other then credit card, checking or savings account offers. They recent sent out an update email with the following car insurance offer at the top of the email.

Nothing completely surprising about the messaging other then the fact that they are beginning to leverage the bankroll of consumer trust to further monetize their traffic. I actually think they could do a better job with the messaging and presentation to differentiate themselves from other related advertisements. The landing page is very similar to a typical lead gen form and I think they risk losing a bit a trust once they become even slightly similar to the rest of the pack. The link ultimately drives the consumer to an Insweb landing page. I am not convinced this is the best way to integrate these new verticals; By simply directing your users off your page to a 3rd party website.

Regardless of my opinion, this is the next step in the evolving lead gen space, albeit a small step. Last month I spoke with now ex-CEO of BillShrink and he mentioned their goal of entering a new vertical every 6 months. This is going to be interesting to watch how BillShrink takes the “referral model” and implements their data presentation and messaging into the mix. Will they simply refer the traffic out a third party or keep the users on their own sites. I think the ladder.

Like I said, however, this is the first step I have seen whereby sites like BillShrink and Mint are starting to cash in their trust for the sake of further monetization.

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As someone who is always looking for the next big entrepreneurial idea, I’ve developed a few ‘heuristics’ to spot where I think opportunity might exist.  One of my favorite heuristics is to look at something (a commercial transaction, process, etc) which hasn’t changed meaningfully in many years.  Compare, for example, how one buys airline tickets today versus how they did 20 years ago.  It’s almost entirely different.  People from the 90s wouldn’t recognize how we compare and buy airline travel online.  Think of this compared to how one buys a house; by and large, the process of buying a house hasn’t changed much in 20 years or even 40 years!  This example, specifically, baffles me.  How is it that travel agents literally no longer exist but real estate agents still get a 3% commission (on both sides!)  Clearly, there must be an opportunity in using technology and innovation to improve efficiency in the real estate agent business.  I continue to use this heuristic to evaluate and spot opportunities.

So, when we started working in the lead generation space, which moves light years faster than most industries, I was surprised to find that the user experience on lead generation websites hasn’t changed much in the last 5 years.  Yes, I can already hear the screams: “Multi-Variate Optimization! Landing page servers! The Taguchi method.”  And while those are great advances in the process of ‘optimization,’ they miss the point; or more clearly, they miss the users.  Regardless of the fanciest landing page servers and algorithms, most users are still treated and interact with lead generation the same way they did 5 years ago.  They click on an ad, see some kind of funnel which requires their information and then they are contacted by the appropriate representative.

Before we talk about what’s missing, let’s first review the amount of progress the space has made.  For purposes of this discussion, I will break this up into 3 parts of the lead generation funnel: before the click, after the click and after the submit.  In all 3 of these parts, we see a large variance in “quantitative” sophistication.  Some people are “old school” and hustle to buy media, try out a few funnels and then manually scrub the lead data.  Others have advanced monte-carlo simulations telling them the optimal keywords to buy and the appropriate price, then landing page servers running multi-variate analysis followed by lead scoring on quality, contact-ability and persistence.  Most of the advances we’ve seen (and we at Ampush have adopted) are centered around treating users as numbers in a game of ‘optimization’ and automation.  How many impressions? Clicks? Conversions?  What was the standard deviation? Elasticity of click-volume to price?

But where is the human in this process?  A human who has nuanced preferences, desires, cultural backgrounds, financial situations, etc?  Clicks and conversions don’t turn into humans until AFTER the submit.  Only after the submit will eBureau or Targus ‘score’ the lead and the human elements about it. Sales people will contact these humans and then try to understand their needs and whether or not their company is a fit.  After the submit, clearly the human matters.  And these days, before the click, the human is starting to matter.  Cookie based display advertising, Facebook demographic targeting and a host of other ‘human’ elements are starting to be considered more and more ‘before the click.’

The missing piece becomes obvious.  Most online lead generators think about humans before the click and then after they submit a lead.  But in between, they forget this person is a human.  The person simply becomes one more data point in a fancy statistical test.  Which brings me back to my original point, I’m surprised to find that USERS are treated and interact the same way with sites that they did 5 years ago.  While I’ve written a more detailed piece on the user experience, the point is simple: treat users on your site like humans and not JUST datapoints.

What are some tips on how to do this?

+ Think like a user.  Have you ever had an itch and used a search engine to scratch it?  Next time it happens, pay attention to every detail.  The ad copy, landing page and how your personal information is treated.   At Ampush Media, we have a “user specialist” whose sole job it is to champion the user experience.  They work with our quant media buying teams to ensure human consistency across all ads (both search and display), landing pages and funnels.  They are incentivized and compensated based on creating a consistent, clean and helpful user experience.

+ Use DATA!  Just because this is about humans, doesn’t mean you can’t use data.  If you run an ad to facebook users over 40, are you treating them differently than under 30?  If someone tells you how much their house is worth, are you matching them with lenders who have historically converted people in that home value band?  The power of using data and segmentation on your users, while their on your site, unlocks a whole new level of lead generation.  It leads to better conversions and a happier user, something our entire industry can benefit from.  At Ampush, this is extremely core to what we do.  I can’t say much publicly because we keep it under wraps, but let’s just say using user data in real time to improve leads is something we’re very excited about.

+ Try different things for different audiences.  Everyone saw the example of the mad libs style form and what it did for conversion rates.  But how many people actually tried it?  Higher ‘conversion’ rate is not just magic.  Users find things better, more relevant and more helpful and that leads to higher conversion.  Try out a ‘skinny page’ loaded with information.  Thinking, hypothesizing and testing is the true form of marketing and building better user relevance.  At Ampush, I’m disappointed to say we haven’t tried the mad libs form.  But we will, very soon.

At the end of the day, our role as ‘lead generators’ must evolve.  Arbitrage and optimization just aren’t enough.  The concept of arbitrage is to buy the same thing from one person and sell it to another and create a risk-free profit.  And in finance, Arbitrage rarely lasts.  As lead generators, we need to view ourselves more as manufacturers.  We take a raw good (internet traffic) and we shape it, chisel it and add to it until a final product is created: a lead.  The better we can build it by using data, thinking like a user and trying new things, the more value we have added and therefore we will earn more profit.  There is no scarcity of traffic (be it search, display, call centers or anything else.)  But there is a scarcity of high quality leads.  The more value-add that comes from our process, the more important and sustainable our industry will become.

And that is Lead Generation 2.0.

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This is a part of an email conversation that took place between myself and a prominent player in the lead-gen space back  in November of ’09. We were going back and forth on the future of lead-gen and I just wanted to take a moment and elaborate on a specific portion of the exchange.

I wrote:

“…I think 2010 is going to be a big year of change and increased evolution in the lead gen space. I think we are going to see more non-traditional companies like Google enter into the lead gen space. The evolution of the short form lead to a referral based model (i.e. Mint or BillShrink) and the re-emergence of of comparison shopping (i.e. Comparison Ads) is going to continue with the traditional companies like LendingTree. Will this evolution continue? How should the mid level lead gen guys react? Should there be concern? Is lead gen going to be completely voluntary by the consumer. Meaning, will they take full control over their data and choose who contacts them?”

I am bringing this up because of my critical review of Tree.com’s LeadsCon announcement. I think it may give a little more color as to why I was a little disappointed in the initial announcement. Currently, there is an opportunity to win life long customers through what I call the “referral based model”. This lead gen model attracts consumers to a site through a separate product or service. A few examples, as I mentioned in the email, are Mint and BillShrink. These companies bring in users by offering specific tools, not necessarily lead gen forms. Example: People sign up for Mint so that they can better manage their finances and based on those finances Mint refers specific money saving offers to the users. BillShrink positioned themselves as an independent, unbiased source that presents opportunities to save money. These opportunities are given to the users prior to giving away their personal information. While this is less then a referral, the commitment level is low enough to make the user feel as though they are in complete control of their data. This is lead gen in disguise.

I have brought it up in other posts, but I think Mint has an unparalleled opportunity to expand into numerous verticals as a highly trusted source. With the amount of comprehensive consumer data they already have on file they could easily provide highly appropriate offers, or better yet allow their current consumers the ability to apply for offers of their own choosing without having to disclose their contact data to the specific companies, unless they chose too. This is where I think Tree.com is missing the boat. By simply building out another directory that relies on content and not putting the effort into using their current assets like Just Thrive to build trust, and eventually create solid “referral” opportunities, and eventually guide the user through all of life’s biggest decisions.

Lead gen is changing and I think you need a hook, not just a form.

Thoughts?

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A little over a two years ago – by only a few weeks mind you – SmartHippo announced their beta launch to the world. Since that launch SmartHippo as continued to grow and evolve into a very interesting platform for consumers looking for the lowest rates. The combination of consumer feedback, ratings and bank posted interest rates gives an interesting spin on the evolution of transparency in the industry. The mortgage crisis hasn’t been nice for many start ups in the industry but SmartHippo continues to make big strides in their continued evolution.

Today they announced two very big developments. 1. The naming of former LendingTree General Manager, Lori Collins as their new CEO. 2. The expansion into the Spanish market with launch of HipoListo.es.

Lori Collins who was on the team that grew LendingTree from $7 million to $476 million has been on the advisory board at SmartHippo for over a year. The transition into a full time role will be a very nice addition to the SmartHippo team.

Press Release:

SAN FRANCISCO, CA AND MONTREAL, CANADA — October 14, 2009 — SmartHippo,
the first web site that let consumers use the power of the community to shop for
financial products, announced today it has named Lori Collins as its new CEO.

“Weʼre very excited by Loriʼs unique experience in both the web and finance sectors,”
said Founder George Favvas, who will continue his involvement in the company as VP
Corporate Strategy. “Iʼm confident that with Lori at the helm we are well positioned for
our next phase of revenue growth.”

As General Manager of the LendingTree Exchange, Collins was responsible for sales,
relationship management, and product management for the LendingTree lender
network. She was part of the executive team which increased revenues from $7 million
to $476 million over seven years.

“SmartHippo has a very compelling business model,” Collins said. “Community-driven
product comparisons have become the norm in other industries, and Iʼm excited to be a
part of the company that is bringing these innovations to the financial space.”

Unlike intermediary web sites which match consumers with lenders based on business
relationships, SmartHippo is an open, transparent marketplace where consumers help
each other find the best financial products. They can ask questions, compare rates and
share reviews and experiences with other consumers and make a more informed
decision. Lenders and brokers participate by answering questions and posting rates,
and consumer feedback keeps them in check.

The Second announcement is even more interesting and that is their move into Spain. Its my opinion that there are a number of opportunities internationally for personal finance platforms, however most companies never give it a second thought. Here is the press release on there entrance into the Spain market.

SAN FRANCISCO, CA and MADRID, SPAIN — October 14, 2009 — SmartHippo, the
first web site that let consumers use the power of the community to shop for financial
products, announced today a strategic partnership with Financialred Networks which will
see the launch of HipoListo.es in the Spanish market.
Under the terms of the agreement, Financialred has acquired an exclusive license to
market the SmartHippo brand and technology platform in Spain.

“The web finance space is in its infancy in Spain and we believe we have an opportunity
to rapidly establish HipoListo as the dominant player in a market of 50 million
consumers” said Jesus Perez, Chief Strategy Officer of FinancialRed. “By leveraging
the SmartHippo platform we were able to significantly reduce our time to market.”

As part of the partnership, SmartHippo will manage the software platform while
Financialred focuses on localization and sales and marketing.As of todayʼs launch,
HipoListo.es mortgage vertical, with other verticals planned for early 2010, he added.
“Weʼre thrilled to be a partner in bringing the first social financial comparison shopping
engine to Spain,” said Lori Collins, CEO of SmartHippo. “Our partnership with
Financialred signifies our commitment to work with and drive profitability to media
companies with existing user bases.”

To learn more about SmartHippo check out this interview here and here with SmartHippo founder George Favvas.

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First, I gotta share a new habit I have started. Usually my kids go to bed around 8pm every night and shortly after putting them to bed I break out the laptop and sit myself on the couch for a little surfing of the Internet and blog posting. In some cases that activity is coupled with an ice cold Corona. Well more recently that Corona is been paired up with a bowl of frozen fruit. If you shop at Costco you can buy a big bag of frozen fruit and mmmm, its good. Plus the kids love and think its a desert! You should try it.

Anyway, as good as frozen fruit and cold beer is, it is not what I was planning on writing about. I want to give my thoughts on the future of lead gen and more specifically the typical lead seller model of generating non-branded leads and selling them multiple times. Its my thought that this model, while will always have its place in the space, is not the most optimal source for quality leads. Listen, I am not going to hop on that crazy bandwagon that some people are on that claim you should never buy lead and you should only generate your own, that’s silly. In many, in fact, most cases it is simply more economical, efficient and ROI producing to buy leads from a third party. Leveraging multiple sources typically is the only way to supply enough volume for many companies appetites.

There is an aspect of the EDU space that leverages multiple sources, but allows for only branded leads. Yes, they pay more for these leads, but they are more qualified and covert better then non-branded leads. This is not the case for all EDU leads. Many come from typical lead gen form that matches the consumer with schools after they have filled out the form. Others come from directories where the consumer fills out multiple branded forms and then their are hybrid models that I think are going to catch on in other industries. These forms and campaigns are completely branded to the school and run on an exclusive basis. These campaigns create quality leads and eliminate the risks of buying leads from non-transparent sources. I believe this model will carry over into other verticals.

What do you think about the current lead gen and multiple sale model? Obvioiusly, not going anywhere completely, but is it evolving into something new?

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I gotta tell you, not only did I network and meet a number of new people at LeadsCon, but I also feel energized from the event. I think I benefit from not being a conference junkie.

You know lead gen is the place to be when Turk from Scrubs is hanging out at the conference looking for lead gen tips. I don’t know, I guess I am tired of hearing about the negatives and am going to focus on the positives. I happened to enjoy a number of conversations with industry peers that revolved around what verticals were hot and it was nice to remember that many of us are Internet Marketers and we are not tied to just one vertical. Sorry to all of you out there that are, but many of have the ability to change fairly easy. The problem is that many of us are afraid of change or worse, don’t believe in change and that is OK for some. Focusing on your core capabilities is all that many of you can do, but for those that are flexible, it is all up to you.

I think it is prime time to invest in innovation. Start from scratch if needed. Some verticals may have less buyers and others are growing month over month. On that note, I wonder what lead gen in 2010 and beyond is going to look like? I had a conversation with one peer that was adamant that the current lead gen model is dying. The model that includes a multi part form and a lead that distributes to 5 buyers, that is. He believed that social media will completely take over and the next generation will ignore the typical offers we see now that include receiving quotes from multiple companies. I tend to disagree, however it will be different and social media will play a big part in that change. Its my view point that the current model will last for years to come, as with many interruption type marketing strategies. Its effectiveness may decrease, but it will continue to be a major part of marketing budgets across the world.

So what do you think? Are sites like Smart Hippo, Zillow’s Mortgage Marketplace, JustThrive going to be the face of lead gen moving forward? How do you think display, PPC and email will play a part?

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By Murthy Nukala
Founder and CEO – Adchemy

Just a few weeks ago, as Microsoft Chairman Bill Gates testified on Capitol Hill about the state of technology and the need to relax visa standards for foreign technologists, I started to think about the state of technology in our industry.  With Internet advertising evolving every day, I’ve begun to develop this ongoing theory that the technology behind lead generation, particularly when it comes to mortgage leads, is on the verge of something really big.  I’m very curious to know if others agree.

From my perspective, and to borrow a very popular phrase, we’re ready for Lead Generation 2.0. Version 1.0, which served up a mix of bad creative and spotty measurement, is over.  We all learned that lead generation companies can’t just provide leads in volume and then pray they convert.  Particularly today, as the universe of mortgage companies continues to shrink and those that still have online advertising budgets spend less than they once did, all of us are being called upon to explain and ensure the quality of the leads we provide.

The million dollar question, then, is how do you ensure quality leads?  I believe the answer is for mortgage companies to leverage scientific and mathematic principles and create data-driven processes that measure the effectiveness of advertising (including creative and online forms) and then make decisions, or allow systems to make decisions, based on the data.  In my opinion, this type of thinking will drive Lead Generation 2.0.

Let me say, up front, that I’m a mathematician by training, so I have a bias in favor of this type of rationale.  Nevertheless, below are two of the scientific and mathematic principles we can employ that I think can have a tremendously positive impact on lead generation.

Experimental Design – at its core, experimental design is about setting up a rigorous experimental structure that yields the most accurate data.  A lot of mortgage companies study data sets, but the number of them that do it the right way is probably very small.  Some organizations try to determine lead quality and conversion ratio by looking at lead flow from the same time of day (i.e. 1 p.m to 2 p.m.) over a seven day period, others over 30 days.  Some look at the type of lead (i.e. purchase or refinance) and compare that with individual banker experience to get a read on conversation percentage.  This is all well and good, but I suspect that many of these experiments are flawed from the start.  In their quest to act, many businesses forget about control groups, randomization and replications in their studies and are therefore making decisions based on inaccurate data.  Effective experimental design can yield important findings that will aid in the delivery of quality leads.

Statistical Machine Learning – a subset of artificial intelligence, statistical machine learning is the process of programming computers to dissect massive amounts of data and effectively “learn” over time so that better processes can be put in place.  Think about how much time mortgage marketers spend trying to figure out why people respond to one type of advertising campaign over another.  Companies have entire teams of business analysts studying data all day, every day.  Yet we have the ability to adopt technology in which forms and creative change based on the raw data itself rather than “supposed” patterns, guesses, or the hunch of the person reviewing the data.  Statistical machine learning, which can effect changes to online ads in real time, holds enormous promise for our industry.

I understand that talk about “experimental design” and “statistical machine learning” might be overwhelming because the concepts are difficult to implement and the thought of hiring an academic to join your organization might seem a little strange.  However, I also know that science and math is starting to become cool again, and that means we all have access to a wide selection of wonderfully talented young people who can help us improve our businesses and the products we provide.

As reported in a recent Computerworld article, according to the Computing Research Association (the group that follows year-over-year enrollment and graduate trends at 170 Ph.D–granting institutions) enrollment in computer science programs, which declined after the dot-com bust, may be leveling off.  In addition, the Bureau of Labor Statistics projects good growth in IT jobs up to 2016, which should keep science and math majors excited about IT.

As I think about the future of lead generation, I see great power in our community’s use of science and math.  I also know there are a lot of people like me, trained in these disciplines, who are excited to make their mark in the online world.  As an industry, we should leverage the knowledge base that these people have and tap their expertise so that we effectively deliver on the promise that all of us make to our clients – to deliver high quality, convertible leads.

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It is complete, I will be joining the Zipsearch! team! To say the least, I am excited for a couple of reasons. First, to join such a solid team that has so much potential. The Zipsearch! team has been consistently generating quality leads for the last 12 years and under the radar too. At one point they were a secret source of mine for Life Insurance leads. Secondly, I am excited to be back in the industry full time! My passion for the industry never died and continued to live through this blog even after I was not directly involved. I feel like I am an evangelist for the lead buyer and quality companies within the industry and that of course will never change. I am extremely excited to make a direct difference in the industry and continue to help lead buyers by delivering the highest quality leads possible. My position at Zipsearchwill be the online Media Manager which will manage all our lead-gen strategies and techniques. Thirdly, I am excited because my views of lead-gen are in-line with Zipsearch!. My goal is to generate quality, not quantity. What does this mean? Leads will not be generated with the goal of generating a click only, this means no crazy square dancing turtles or crazy teaser rates. These types of ads generate quantity, which is fine for most lead generators, but we will focus on quality.

This takes much more work and thought, but the pay off is huge for the lead buyer, consumer and ultimately Zipsearch. This as far as I am aware of is the only situation where a lead buyer and extreme lead critic has taken this kind of role. To say the least, I am excited.

The industry has gone through many changes on the last 12 months. Lead buyers have suffered and faltered do to market conditions and poor lead management. Tier 1 lead providers have been exposed for unfair pricing, over selling leads and questionable lead-gen tactics and now our suffering because of it, showing quarter after quarter loses. The rough times are not over for many, but for others opportunities to rise to the top are all around. Companies like Zipsearch, QuinStreet, Bills.com and Adchemy are poised to take the industry by storm. (see I am still fair and unbiased ) The industry is becoming more and more concerned with education and quality. Companies like Leads360 and Kaleidico are holding client education events with one goal in mind and that is to help the lead buyer and the lead generation companies. The ideas are new and evolving, but none the less are going to benefit so many. I know I am maybe in my own little silo, as Atul Patel likes to say, but I am excited and feel that the industry is changing for the best.

Similar to the fires that ripped through the mountains less than a mile from my house, the old has been burned away and new fresh grass is beginning to sprout from the ground healthier than ever before. Like the ash from the fire, the mistakes we have made in the past fertilize our thoughts and help grow new ideas, innovation and opportunities. The industry is sprouting and I am excited because I am apart of it. I officially start January 2nd and I look forward to meeting my new family at Zipsearch and continuing to grow industry relationships.

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I am really beginning to feel the winds of change in the lead generation space. In the last few post I covered Smarthippo which combines the feel of a social network, a rate comparison engine and a lead generation site. More recently there has been another addition to the “consumer controlled” rate comparison party. Now I have been monitoring this company for the last few months because I noticed a little buzz brewing. Well now it seems they are going to unveil what they have been working on at the FINOVATE conference.

Mortgagebot is primed to unveil their new platform, Mortgage Marvel. Mortgage Marvel’s goal is to improve the consumers experience when shopping for a mortgage. They claim to be the only online mortgage shopping website that delivers real-time quotes from multiple lenders in complete privacy. Mortgage Marvel allows a consumer to compare rate, fees and closing costs and then directly apply online. They also claim that you could have an approval in 30 minutes.

Taken from the Mortgage Marvel website:

Why you can trust Mortgage Marvel.

We see it like this—if you can accurately research a pair of shoes, a refrigerator, or a new car without disclosing everything about who you are, then why not a mortgage? So we built a site that we’d want for ourselves. Mortgage Marvel and the visionary lenders we present believe you deserve all the information you can possibly have right from the start.

Unfortunately that does not answer the question at all. In fact, that makes me think that they are really nothing more then a Bankrate only with the addition of the ability to apply online. They also say that no personal data is required, only loan amount, property value and zip code. With the limited amount of data collected the question has to asked: Are consumers being led to believe that the rates they are choosing can actually be attainable?

The winds of change are increasing, but I truly wonder if many are simply reinventing the wheel and simply using the buzz words we discuss here so often.

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I enjoyed a brief discussion with the co-founder of SmartHippo this morning and wanted to share it with you.

I thought it was very enlightening and I think you all will enjoy it.

Let me know what you think.