double POSITIVE Marketing Group, Inc.

Here at DoublePositive, we’re big fans of LinkedIn. Every person in our organization, no matter what their function, has a LinkedIn profile. We use it to generate sales leads, network with partner companies, to rectuit potential employees, to interact with a larger community — we even use it to promote the blog you are reading right now.

While we are all very active users, we try not to be LinkedIn “whores.” In other words, just because I’ve met someone once, swapped business cards at a trade show, or know someone through some random connection — that doesn’t mean I will accept your LinkedIn invitation to connect. I’ve got a good network, and I don’t want to dilute it.

We’ve also noticed how targeted the advertising on LinkedIn is, and why shouldn’t it be? LinkedIn knows everything important about me — my age, my sex, where I live, my job, my address, where I went to college.  Combine all of that information I’ve provided with some behavioral targeting, and LinkedIn knows me better than I know myself. I would say that I click on more ads on LinkedIn than any other website I’ve ever visited.

So LinkedIn is HOT, helped in large part to the $15 billion valuation Facebook recently received. So I wasn’t surprised to read that News Corp. is considering acquiring LinkedIn, perhaps for $1 billion. Is LinkedIn worth $1 billion? Who knows — after all, they are doing no more than $100 million in annual revenue. But, what I do know is that this guy is a freaking idiot:

“It’s all bulls*%t,” says Global Equities Research analyst Trip Chowdhry. “The market has to come to some realization that LinkedIn just has a bunch of email addresses. I don’t think News Corp. is a sophisticated buyer. The company should be worth 1.5 times revenue and that’s it.”

Wow… Here is a guy who just doesn’t get it. LinkedIn “just has a bunch of email addresses.” And Google is just a bunch of links. And YouTube is just a bunch of videos. And Ebay a bunch of junk.

While newspaper publishers continue to see shrinking revenue from classified advertising, News Corp. sees LinkedIn as a critical component of its recent acquisition of the WSJ and other publications around the world.

Question the valuation, but don’t make yourself look like a fool by suggesting that LinkedIn is nothing more than an email list.

Southern Capitol Ventures is a new investor in DoublePositive.

They will be hosting a “Calling All Entrepreneurs” event in Reston, VA next week.   

http://southeastvc.blogs.com/southeast_vc/2007/11/calling-all-ent.html

I would encourage any entrepreneur eager to speak live with an east coast VC to attend.

SPF

I found a cool use of technology being used by universities that I wanted to share.  Schools vying for the attention of potential online students are now turning to iTunes U.  iTunes U provides free video courses, campus speeches, and other events from 16 institutions to iTunes users around the globe.  These resources have been downloaded more than 4 million times to date.  It seems the quality is inconsistent, and the educational value may be quite limited at this point relative to participating in the class in person.  However, I have to think that over time, the pure marketing and recruitment value from will become the biggest opportunity here.  Just imagine the potential value of this broad exposure to an online university that may be better prepared to create a compelling video course as compared to a traditional university planting a camera in the back of the classroom.  Interesting indeed, stay tuned.

Yesterday DoublePositive announced we closed on an additional $4 Million in venture funding. The news has received a good amount of attention on the wire, in various news publications/websites, and in the blogosphere:

Online Marketer DoublePositive Nabs $4M in Latest Funding Round 
Baltimore Business Journal
http://www.bizjournals.com/baltimore/stories/2007/11/26/story16.html?ana=from_rss

DoublePositive Raises More Money – Bright Future For Lead Generation?
Leads360
http://www.coffeeforclosers.org/?p=24

DoublePositive Raises $4 Million
LeadCritic
http://blog.leadcritic.com/live-transfer-leads/doublepositive-raises-4-million

DoublePositive Closes on $4 Million in Venture Funding
Yahoo!
http://biz.yahoo.com/iw/071119/0330511.html

DoublePositive Raises $4 Million
Private Equity Hub
http://www.pehub.com/article/articledetail.php?articlepostid=8960

DoublePositive Closes on $4 Million in Venture Funding
MSNBC
http://www.msnbc.msn.com/id/21885915/

Southern Capitol Ventures Invests in Maryland Sales Lead Firm
WRAL / LocalTechWire.com
http://www.localtechwire.com/business/local_tech_wire/venture/story/2068619/

DoublePositive Adds $4M Round To Live Sales Lead Business
TechJournalSouth
http://www.techjournalsouth.com/news/article.html?item_id=4308

DoublePositive Marketing Group Inc. Raises $4 Million
AmericanVentureMagazine.com
http://www.americanventuremagazine.com/news.php?newsid=3808

Raleigh VC invests in Baltimore Company
Triangle Business Journal
http://www.bizjournals.com/triangle/stories/2007/11/19/daily11.html?ana=from_rss

Congrats to Sean and Team at DoublePositive
johndemayo.com
http://www.johndemayo.com/johndemayocom/2007/11/congrats-to-sea.html

DoublePositive Closes on $4 Million in Venture Funding
StreetInsider.com
http://www.streetinsider.com/Press+Releases/…

Southern Capitol Ventures Explores New Territory in Latest Deal
LocalTechWire.com
http://www.localtechwire.com/business/local_tech_wire/venture/story/2074681/

Leads Firm DoublePositive Raises $4M 
Alarm Clock
http://www.thealarmclock.com/mt/archives/2007/11/leads_firm_doub.html

So, I literally heard just moments ago that AT&T agreed to buy Ingenio.

I’m certain all readers are very familiar with AT&T.

I first heard of Ingenio in 2003.  They were an early leader in developing pay-per-call (PPC) software.  What I felt made them unique when compared to other pay per call software players in the space (i.e. Voicestar, eStara, Who’s Calling, etc.) was that they built a supply-side network in addition to enterprise-class software.  In other words, they had COGS, whereas most companies that sell software do not.  But their COGS were performance-based (on a pay-per-call basis, of course), which immediately commanded my respect.

However, Ingenio does NOT have a consumer brand or reach.  THAT is the genius of this deal.  Whereas Ingenio had to act essentially as white label on the B2B side of a company who actually HAD a direct B2C consumer touch (i.e. AOL), AT&T represents that and more as a single company.

Bravo to the founders and management team of Ingenio.

Now more on the deal analysis side…

I read through the press release and infer several key thoughts.  In this space, we all struggle as branding and corporate-communications marketers with “what name should we call it.”  Pay-per-call may describe the cost structure, but not the product.  AT&T and Ingenio have decided on the term “phone leads” as their collective product:

Ingenio’s Pay Per Call service is an advertising platform that allows businesses to manage their ad programs and generate valuable phone leads.

I also was thrilled to see a term I doubt has ever been a part of the AT&T vernacular – “performance-based”:

Integrating Ingenio’s Pay Per Call technology will enable AT&T to take advantage of a growing trend toward performance-based advertising.

So, on the outside, we’d all love to know how much, at what multiples, etc., but none of that juicy information was disclosed.  We’ll have to rely on the rumors of the blogosphere for that.  However, a tiny bit of information could also be inferred about the deal value from the press release:

The transaction is expected to have minimal impact on AT&T’s results, including earnings per share.

So what exactly does that mean?  That means that Ingenio’s profits probably will not show up on the radar of $7+ Billion in net profits AT&T will book next year. J

Big surprise.

That said, apparently AT&T execs see the value in a business that is able to connect live, genuinely-interested, and qualified consumers to sales professionals via “phone leads.”

Who can argue? ;-)

So here’s the summary of how I’m processing this deal:

1. Awesome deal for both AT&T and Ingenio
2. This is the second successful “Live Leads” exit in the space (intentionally not counting Skype)
3. DoublePositive is about to become a significant customer of AT&T in a new sort of way

SPF

HAMILTON INVESTMENT PARTNERS, SOUTHERN CAPITOL VENTURES AND EXISTING DOUBLEPOSITIVE INVESTORS PARTICIPATE IN ROUND

November 15, 2007 – BALTIMORE, MD – DoublePositive Marketing Group, Inc. (www.doublepositive.com), the industry leader in LIVE Hot Transfer Leads for sales organizations, announced today that it has closed an additional $4 Million in venture funding. The financing will help fuel DoublePositive’s growth by increasing sales and marketing efforts and expand the business into new vertical markets and offerings.

Several new investors, as well as all of DoublePositive’s previous investors, participated in the round. New institutional investors participating in the round include Hamilton Investment Partners, Southern Capitol Ventures and Slate Venture Group.

Frank Bonsal, co-founder of New Enterprise Associates (NEA) and former General Partner at Alex Brown, and Dave Willey, former Chief Financial Officer of Capital One, also participated in the round as individual investors.

“We are very excited to be a part of the impressive growth story at DoublePositive. We believe DoublePositive will continue to be the leader in the live lead generation space, and we see tremendous opportunities for DoublePositive to diversify into new Internet lead-buying markets,” said Marc A. Cole, Partner at Hamilton Investment Partners. “We think DoublePositive is positioned very well to build on the great success they’ve had and capitalize on the tremendous opportunities that exist in industries such as Education, Insurance, and Consumer Debt/Credit.”

All of DoublePositive’s previous investors also participated in the fundraise including The Grosvenor Funds, WWC Capital Group, John Ferber (co-founder of Advertising.com) and Stein Kretsinger (former CEO of TheLoanPage.com).

“We’ve witnessed DoublePositive’s growth first hand over the last year. Grosvenor Funds and the Board both know that this new investment is well-deserved given the success this company and this management team have shown to date,” said Oak Strawbridge, a Grosvenor Funds Principal and DoublePositive Director.

“This fundraising will help solidify our position as the leading LIVE lead generation company by allowing us to focus on diversification into new markets,” said Sean Fenlon, DoublePositive’s co-founder and Chief Executive Officer.  “We’re absolutely thrilled about what our new investors will bring to the table with their experience and knowledge in building strong companies with dominant position.”

A leader in the live leads space, DoublePositive continues to provide a cost-effective and time-saving marketing solution for companies seeking the highest ROI from their marketing and advertising dollars. 

It seems that two of the fastest growing categories for Hot Transfers are education leads and insurance leads.  These industries seem to be a bit unique in their relationships between the Lead Sellers and the Lead Buyers, and these variations are creating some unique uses of our DoublePositive Platform™.

One of the uses that has been quite successful is the combining of Data Lead Sales with Hot Transfer sales, which has:

- Increased the leads per day a buyer can effectively handle
- Increased the closes per day per sales rep for the buyer
- Decreased the cost per policy or enrollment

This is being done by putting the DoublePositive Platform™ between the Internet Lead Seller and the Lead Buyer.  All leads are imported into the engine in either real time or batch mode.  The Platform then scrubs and scores the leads, putting them in order of most likely to close, to least likely to close.  The top ½ (higher quality leads) are pulled out of the system and sold to the buyer as a regular data lead for the lead buyer’s Outbound sales team to call down. Since the average lead quality is higher, the overall performance is better (contact ratio, qualifying ratio, close ratio). The bottom half is put thru the Hot Transfer engine which uses the DoublePositive call center agents and a sophisticated technology process to efficiently call, contact, qualify, and transfer the LIVE consumer to the lead buyer. This teams ratio’s are high because they have 100% contact with a genuinely-interested consumer, and only need to close the sale.  The combined effect of the Inbound and Outbound teams allows for more data leads to be handled per day, as well as creating an improved ROI for the Buyer.

Another popular use of our Platform in these verticals is to provide the Buyer with the flexibility to switch back and forth between LIVE Hot Transfer Leads, and Voice Verified Leads on the fly.  If they have the man power to take incoming calls, they Turn On the application and their phone begins to ring with interested and qualified consumers.  Should they be unable to take incoming calls for a while, they Turn Off the application and our call centers will continue to call their leads, make contact, confirm interest, qualify, and inform the consumer that a representative will call them shortly.  That Voice Verified lead is then shipped real time to the Buyer, and includes all data captured as well as the audio recording of the entire call center conversation.

We are currently working a few additional uses of our Platform in these and other verticals, and we’ll post info on these as they develop and are tested.  If your using Hot Transfers, or phone based services in a unique way, I’d love to hear about them.

I have been at DoublePositive Marketing Group for almost a year, and the mortgage market has changed so much in that time. Mortgage companies as well as individual loan officers have had to adapt to the changes – especially in regards to marketing.

To give you a little background, prior to working at DoublePositive I was in the mortgage industry for over 6 years. I started back in 2000 and moved up through the years to the point where I was managing the day to day operations for a mortgage company in Baltimore. I spent a lot of money over the years testing out every type of marketing. When I started, rates were over 8% for a 30-year Fannie Mae fixed loan and 2nd mortgages and 125s were the market that we targeted. We purchased internet leads and telemarketing leads as well as dabbled in direct mail. Leads were super cheap and I would burn through them at an alarming rate. Then the refi boom came and so did all the marketing companies with the best leads ever generated. Conversion rates were unbelievable and cost per funded loan was not even an issue. All you had to do was pick up the phone and you were going to close loans. I will get 20 leads a week and I would have ton of apps and would be pitching deals daily. Those were the good ‘ole days!

We now fast forward to 2007 and the market is a mess. Every day the media is painting another picture of how bad the mortgage industry and the amount borrowers that are in foreclosure. Reports come out daily with how much money banks and lenders are losing each quarter and if it will ever end. Remember the good ‘ole days? Well I hate to tell you, but they are gone.

The days of applications flowing like a water from a firehose are over. The $200 cost per funded loan are over. Today is a new day in the mortgage industry and we all need to embrace this if we expect to survive. I speak to clients daily and one issue that has come to the forefront is “expectations.” I speak to loan officers who understand that the market is tougher than ever, but they still expect the same conversions they had in 2002 and 2003. If you think about it, how can they make sense? If less people can qualify for a loan, then you should expect that you would need to speak to more people than ever before to get a loan. When I explain this to loan officers they agree that the closing rates have gone down, but they say that they want workable deals. That simply cannot work under the current market conditions.

Today, the two biggest issues are LTV and credit, and these are issues that the market has not had to deal with in sometime due to the refi boom and basically anyone could get a loan.  For most, this is the first time that loan officers have had to deal with this issue, but for those who have been in the business this is no surprise.