What Cost Per Lead !
September 4, 2009
Robin Caller’s take on pricing of online leads in UK.
I read with interest a recent US article http://www.clickz.com/3634831 -
which suggested that average prices per lead had been calculated. I truly
wondered if the research had any merit closer to home, in UK.
At a recent IAB “lead generation”
taskforce meeting in the UK, the question arose as to whether the taskforce
ought to suggest prices for leads in the white papers we produced.
The final decision was to keep prices out of white
papers – but ensure that the white papers explained why certain leads may cost
more than others.
The debate in the room seemed fairly well set -
there are brokers who can sell large volumes of leads at low prices and there
are specialists who can sell low volumes of leads at higher prices.
At these opposing ends of a spectrum, it became
unreasonable for the IAB or any white paper to suggest a “reasonable”
or fair market price. Instead, it seemed
more sensible to outline and define the factors that might reasonably affect
the price of a lead.
The X-Y axes of the graphs for pricing appear to
be fairly well set also, but they become more varied, for example:
(i) If incentives are used by a supplier to
generate a lead for an advertiser, the relevance of the offer will impact on
the quality of the lead.
(ii) If
incentives are used by a supplier to generate traffic to their site, but not
actually to generate the lead, the relevance of the offer, plus the clarity of
presentation, will impact on the quality of the lead.
(iii) If
the advertiser wants to be the sole acquirer of the lead, then the quality of
the lead will be higher than when the lead is also acquired by several
competitors and so the multi-variants
present themselves.
A rather simplistic and disingenuous argument
would be that “every lead will find its own price” and so it is not
for the industry to clarify the right price, but allow the market to find
itself in due course. However, it is worth pondering just how much life
insurance and pension miss-selling took place before the financial services
market found itself – if indeed it has. So, in the early years of online lead generation,
who would argue that tens of millions can be spent badly before the online lead
generation marketplace finds the “right price per lead”.
And what is abundantly clear already is that the
right price for a lead depends massively on the lead conversion process, CRM
management, and fulfilment capabilities of the lead buyer. Put simply, the
highest quality lead, sourced from the hottest hotbed of qualified leads in the
world, is valueless the acquirer who does nothing with the lead for a
year. As always, there’s more than one way to look at things.
Keeping aside the vast expanses of the US and their “quantity and speed
over quality and caution” mantra, let’s get back to the issue of pricing
leads in the UK.
Worth pondering, in all this, is whether an
advertiser can truly obtain “impartial” advice from a company that
actually “sells”, or “buys and sells” or
“generates” leads? In academia, a “conflict of interest” is
generally volunteered when a conflict of interest might be present.
For these reasons, I hope that the IAB taskforce, and the white papers we
produce, will go some way to introducing a “best advice” philosophy,
and an “utmost good faith” principle, ensuring that each company
offering a lead price will explain – as well as it can – why that price is
relevant to the particular methodology used in generating or selling a lead.
Until such time as the supply side is ready to volunteer itself to the
transparency of definitions for each “lead generation processes” -
which I believe it will do in double-time – the buyer should test, assess,
revise, optimise, and assess a wide variety of lead suppliers.
After
all, it is rather simplistic and plain wrong to believe every customer can be
acquired for the same price as they are acquired through a Google PPC campaign,
just as it is rather simplistic (and plain wrong) to believe every customer can
be acquired for the same price as they are acquired through a billboard
campaign.
At the same time as all these factors are known, the growing band of
companies involved with the IAB taskforce, it is clear that “online lead
management” and lead generation are areas of online marketing that rank
highly in the thoughts of most marketers. The recession has done much to
inspire a search for increased efficiency in many areas of advertising and
marketing.
– ENDS-
MULTIMEDIA ELEMENTS
QUOTES
Click here to follow GoAllOver on LinkedIn and LolaGrove here
Quotes by Robin Caller, Founder, GoAllOver Ltd., UK
1. “Keeping aside the vast expanses of the US and
their “quantity and speed over quality and caution” mantra, let’s get
back to the issue of pricing leads in the UK”
2. “It is rather simplistic and plain wrong to
believe every customer can be acquired for the same price as they are acquired
through a Google PPC campaign, just as it is rather simplistic (and plain
wrong) to believe every customer can be acquired for the same price as they are
acquired through a billboard campaign”
3. “A rather simplistic and disingenuous argument
would be that “every lead will find its own price” and so it is not
for the industry to clarify the right price, but allow the market to find
itself in due course.”
Please contact Gunjan W. for interviews or additional quotes from Robin Caller.
Notes
to the Editors
- ABOUT GOALLOVER: Since October 2001, Goallover Limited has been responsible for developing, introducing, and delivering new market solutions to the UK online advertising industry. Amongst its “finds” and companies launched into the UK are P2P file sharing platforms Kazaa, Morpheus and Grokster, Tickle Inc, UGO.com, Glam.com.
- ABOUT LOLAGROVE: LolaGrove is the UK’s only independent lead management software,
capable of validating and verifying leads being bought and sold. The
Goallover team affirms in LOLAGROVE’s unique verification mechanisms mean that data
transacted via LOLAGROVE is of the highest quality.Originally developed in 2006 for Monster Inc’s consumer division
and deployed across sites such as Bebo, Ringo, Hi5, LoveHappens and
Tickle, LOLA was designed and built to manage the lead generation business
of Monster’s Grapevine consumer network.
- ABOUT ROBIN CALLER: Robin Caller,41, from Newcastle upon Tyne, hold a BA in Psych from
University of Newcastle and an MA in International Business, University
of Westminster. Robin joined the online industry in 1995, originally selling
domain names, and then taking a role with FortuneCity where Robin became
the European Director of Sales and Business Development. FortuneCity market
capped at 1.2bn Euros at the height of the first dotcom boom. Robin founded
Goallover in 2001, and has spent the past 8 years delivering advertising
solutions to brands and agencies. Robin has spearheaded the establishment
of the “lead generation” taskforce at the IAB, while his company,
Goallover, currently license our industry-leading Lead Management software,
LolaGrove, to agencies and brands globally
RELATED LINKS
CONTACT INFORMATION
-
Gunjan W (Client)
GoAllOver Ltd., UK
InHouse PR personnel
Suite1, 6 Owen Street, Angel,
London EC1V 7JX
207 843 0130 (office)
207 278 6570 (fax)
783 771 5596 (cell)
Technorati Tags: online lead generation | cost per lead | UK online advertising | online advertising measurement | ROI | UK OLG | CPL
