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Recently we argued over what a valid lead is and the numerous reasons why a lead could be returned, but based on a conversation that took place with lead generations own Maestro, Sean Fenlon of DoublePositive, I have decided to further define what a lead is. In fact, based on Sean’s opinion we should define each action point throughout the process that can determine a payout. This means regardless if specific filters and return reasons, what are the specific actions that can determine a specific compensation.
This may seem rudimentary however as Sean can attest that the term “lead” is being used very loosely. The industry is growing at a rapid rate and if these are not clearly defined somewhere we will continue to be lost in translation. With that said, I am going to give it a whirl and appreciate any feedback or corrections you all can provide.
Put simply, an impression is an advertisements opportunity to be viewed by a user when the web page is loaded within a browser. Regardless of if the user clicks on the ad or link a fee is accrued by the advertiser. Very basic and simple concept typically referred to as a Cost Per Impression (CPM).
Another simple definition whereby an advertiser pays a publisher when the action of clicking on the advertisement is completed. The ads typically are contextual and are shown based on the content or the keywords inputted by the user.
Both of these two actions do not typically require any information to be filled out by the user. There are rich media ads that can implement a certain level of data collection, however for the sake of broader definition I will stick to the statement that says it is not typical. This usually is referred to as Cost Per Click (CPC)
Lead
Our friends that contribute to Wikipedia have yet to define what a lead is. I would hate to think that this is the reason why there is so much confusion, so let’s define a lead now. This definition is very simple as well, however it often gets tied in with a number of different attributes and filters given by the buyer. First, let’s all be clear that a lead is not a click or an impression. A lead is when the user completes a required action that notifies the advertiser that they are interested in their product or service. This action will consist of an inquiry process being completed and submitted to the advertiser. The inquiry process that needs to be completed is most typically a phone call, a response card via snail mail, or the completion of a web form.
That is a lead. As I mentioned above, the definition of a lead does not include any filters or validation. It is simply a person that takes an action beyond a click or an impression, that includes a certain level of information or opt-in provided by the user. Whether or not you only buy or sell leads with specific filters will be determined by your own specific needs.
Typically called a Cost Per Lead (CPL).
Transfers
A Transfer is the next step beyond the lead. Typically called a “Hot Transfer”, this process includes the qualification of interest followed by the immediate transfer via phone to the buyer. The buyer of the transfer is billed for every unit successfully received from the transfer company.
Sale
This is the least typical action that results in a payment, however it does happen. The most popular company to implement Cost Per Sale pricing is LendingTree, which made it popular during the rise of the mortgage lead vertical. I believe LendingTree no longer uses this pricing structure, but I could be wrong.
A CPS is achieved when a lead generated by the marketing company results in a sale. Once the sale is achieved the marketing company is paid a fixed price. The CPS can also be determined by using a fixed or sliding percentage of the revenue generated by the sale.
Conclusion
Let’s use this a starting point to more clearly define the lead generation process. If you have additions or suggest a better way of defining these actions please submit them in the comments and I will be happy to take them into consideration and update the post. We can use this post as our own wiki and then possibly submit the definitions to the real deal.
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10 Comments
I would define a lead as a real consumer that has the propensity to genuinely be interested in the offer put in front of them. The offer needs to be clear and direct (No post-form 3rd Party crap based on category.)
Filtering – Yes. Validation – Yes. If a lead is bogus, it’s not a lead. The lead provider needs to provide a honest effort to weed out their data. Mickey Mouses need not apply. Phone numbers of 555-1212, etc. should be corrected before allowing submits.
As an old-timer lead generator and buyer I’m appalled at the state the lead business has gotten itself into.
Just because you farted on data doesn’t mean you added any value.
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Hi Jason,
I agree with your sentiment. I am shocked that there lead companies out there that knowingly manipulate data, only to make an extra buck, and get away with it.
However, the raw definition of a lead excludes filters. Each buyer will have different criteria for paying for the lead and there is no way we can aggregate all those criteria into one definition. You even said that “if a lead is bogus, it is not a lead”. I think in other words you are saying, ” A lead can be bogus, but I am not paying for it”, which is a valid statement.
thoughts?
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I think your raw definition of a lead was written by a lead generator with no retail buyers. ;*)
I’m sure the are people doing this a lot longer than I have, but I’ve been doing direct response (the oldy time name for lead generation) for 25 years now. When we first started with Internet Lead Generation we had 2 types of leads. Retail and Wholesale. The wholesale leads were what we couldn’t sell do our clients at retail. So we sold them to comptetitors at a discount. The idea of bogus leads never entered the scene until years later when 3rd parties started generating leads to sell into our tight knit community of networks selling directly to end-user clients. The reason bogus leads never entered into the system is because they aren’t leads if they are bogus. A lead is a person with a genuine interest to do something. They might not do it, but they genuinely expressed interest. In the olden-days if a person entered in bogus data in the form it woud die right there. It’d never get past our validation or filtering, and never get sold to client or a comptitor.
So, I’m not sure why a definition of a lead would allow bogus data. If does, then I guess I’ve been in a different business all these years doing something completely different than lead generation.
[Reply]
The definition was written by a person with mostly retail buyers and also as few years of lead buying under his belt.
With that said, I agree that a “lead” is a person who expressed legitimate interest in a product or service. So, with that said, maybe to call a “click” a “lead” it needs to pass a certain level of validation?
That means data submitted to the buyer, that does not pass front end validation or a specific level of form validation, is not a lead. It is just junk.
Really the definition of a lead does not get into validation, because it is up to each buyer to determine what level of validation they will pay for. Example, some buyer will reject leads because they do not meet a specific lead score. Are these still leads? Yes. Some buyers will take all leads, right price the total campaign and not return any leads. Does this mean they are all good leads? No, but they are all leads.
From a marketing perspective a lead is a lead, a click is a click and an impression is an impression. That is the goal with this post. If we can get to that point, which strangely enough we are not there, because people are saying they are selling leads when in reality they are selling clicks, then we can build on the topic of what a valid lead is.
So, maybe a lead is the expressed interest in a product or service by a person that includes valid contact information?
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I say we could agree to dissagree. When I buy leads, my suppliers have to sign an agreement that clearly states i’m not interest in a group of data that happens to look like a like. They agree that the intent of the consumer was to do something, and the data is valid and filtered to the best of their ability, and the consumer only got to me because they responded to an offer that was clear and upfront about what the the offer’s intention was.
I have have guys call me everyday to sell me crap, and after I get done with them only a couple a week actual get what the lead business is about. Not just crapping down a pipe and calling it gold.
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Jason,
I am not even sure I can agree to the fact we are disagreeing. lol
We are talking about two different things. You are talking about leads you want to pay for. I am talking about a defined action, regardless of quality.
“Clicks” include a ton of fraud, but they are still clicks. There is no way a click can be an impression or a lead. There are bogus leads, invalid leads, and valid leads, but they are all still leads. They are not clicks or impressions, right.
Thanks for the debate and for reading the blog.
[Reply]
Michael,
The premise of this post intrigued me, so I decided to take a look at our own lead generation agreement and piecemeal together definitions that are referred to “Leads”. Perhaps you can take our in-house definitions and help apply them to a broader lead definition framework.
I’ll provide our legal definitions, along with my comments in parenthesis:
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“User” defines the individual consumer, student, prospect, or customer who has expressed an interest or may be interested in the products or services marketed in a particular Campaign.
(i.e. a website visitor that we don’t know much about yet [ip address, OS, browser, referrer, keyword, etc])
“Target” defines a particular promotion, product, offer or service for which the User is submitting personal information.
(i.e. in EDU it would refer to a school, campus, or degree, in insurance it might be a particular type of insurance, in mortgage it might be a particular type of loan, etc.. pretty open ended)
“Lead” refers to the collection and compilation of information regarding a user who has willingly provided sufficient information to make contact with the user by available electronic, telephonic, or postal means.
(i.e. Perhaps a Publisher has collected personally identifiable information but not matched the user with a product or service yet)
“Valid Lead” defines a user who has given their explicit authorization to be contacted by Company or Client for products or services and whose demographics have been programmatically qualified as valid data.
(i.e. a lead that, in general, can be sold and/or billed for, the Lead has expressed interested in being contacted)
“Targeted Lead” defines a Lead who has expressed interest in a particular Target or Campaign by responding to or making an overt act in response to a Target or Campaign.
(taking valid lead’s one step further, a targeted lead refers to connecting a valid lead with a specific product or service, i.e. UoP over Capella, Geico over Progressive, etc)
“Invalid Lead” defines a Lead that the Client has been unable to contact due to invalid or misrepresented contact information.
(i.e. we’ve programmatically confirmed the data as seemingly valid, but the number was disconnected, email address bounces, etc.)
“Duplicate Lead” defines a lead that can positively be identified as the same user that was previously submitted to Client by Company in the last [x] days.
(self explanatory)
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I’ve got more thoughts on this, and I’m looking forward to seeing the discussion evolve.
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Derrick,
I think your agreement does a pretty good job of defining a lead.
““Lead” refers to the collection and compilation of information regarding a user who has willingly provided sufficient information to make contact with the user by available electronic, telephonic, or postal means.”
I like how you then define what valid and invalid leads are.
I think this is more inline with the premise of the post. Thanks for the contribution.
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Clicks? I thought we’re talking leads.
My contracts have similar declarations as Derrick shared. As anyone, these declarations get bigger over time as we see more shenanigans.
In my view whether I pay, or not for leads. The premise of a lead to me means there is something (intent of the consumer) behind the lead. Not just the fact I have this data that looks like a lead.
That’s where allot of misguided 3rd party lead providers miss the boat. The declarations spell the expectation out to get them on track, but never the less, the ones selling data and not leads get turned off quickly and never are heard from again.
I guess the biggest thing is if you don’t sell leads directly to end-users you never feel their pain. When data that looks like a lead, but has no intent or alignment to the offer messes up the whole works and 50 of these guys are ready to neuter you, you feel their pain. Or least can empathize with your balls.
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Great article. It’s very helpful to break down the lead into these different levels of interest.
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