double POSITIVE Marketing Group, Inc.

This is very Strange.

DoublePositive is just shy of four years old.

Always a stellar track record with the Better Business Bureau, customers, partners, and everyone in between.

The Ripoff Report site and the site’s practices are controversial up and beyond any one individual report, but you should make your own decision:

http://en.wikipedia.org/wiki/Ripoff_Report

Nonetheless, in the last eleven days, we were suddenly attacked by two bogus reports on this controversial site: www.ripoffreport.com.

I’m a huge consumer advocate, a huge fan of David vs. Goliath, and constant supporter of the free press.

That said, this situation is just plain wrong.  The system broke.

I suspect the DoublePositive blog readers will form their own opinion, but I wanted to be on record with mine.

SPF

LeadsCon Blog Coverage Table of Contents:

• LeadsCon Highlights — Day 1 — Wednesday, April 2
• LeadsCon Highlights — Day 2 — Thursday, April 3
• LeadsCon Highlights — Day 3 — Friday, April 4
• Final Thoughts – LeadsCon 2008
• Other Blog Coverage of LeadsCon

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So, I’m writing these blog posts on the plane returning from the first annual LeadsCon 2008 and I’m feverishly trying to capture all my reflections of this great show.  Jay Weintraub exceeded everyone’s expectation with this fantastic gathering, and he was thanked at some point during almost every panel.  A first-year conference with over 600 attendees is remarkable.  I would not be surprised to see it double or even triple next year.

Now keep in mind as you read through that I was a hungry and eager deal-making CEO with my biz dev hat on while I was attending this conference, but I still made a deliberate effort to observe almost every panel session and presentation.  But as you can imagine, I was often distracted by potential deal-making and related activities.  I guess I say this as a disclaimer that these blog posts are intended to be just some highlights that I witnessed through my own eyes, and it is not intended to be comprehensive news article covering every detail and fact-checking every reference.  However, if any LeadsCon attendees see anything significant that I may have not witnessed or presented here, please by all means add to the discussion in the comments.  If I unintentionally got anything dead wrong, please contact me and I can change it.

Now, onto the highlights…

LeadsCon Blog Coverage Table of Contents:

• LeadsCon Highlights
• LeadsCon Highlights — Day 1 — Wednesday, April 2 (below)
• LeadsCon Highlights — Day 2 — Thursday, April 3
• LeadsCon Highlights — Day 3 — Friday, April 4
• Final Thoughts – LeadsCon 2008
• Other Blog Coverage of LeadsCon

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Must Know Advances in Lead Quality

Moderator: Dave Wengel, GM, Interactive Markets, TARGUSinfo

Alex Baydin, CEO, PerformLine, Inc.
Dave Behn, Partner and Director of the Performance Marketing Group, Cole & Weber United
Matt Coffin, CEO, Coffin Capital and Board Member at eBureau and Mahalo.com (founder and former-CEO of LowerMyBills.com)

This panel was almost exclusively focused on lead scoring and lead segmenting, which was probably the single biggest buzz concept of the conference.  I’m torn on this one.  Let me start by saying that I’m a huge fan of lead scoring using regression analysis.  At DoublePositive, we have been using lead scoring for over three years to determine which leads to send to which call center and when, and it has yielded significant value for us.  I know there are top-tier lead buyers that do the same and make for great case studies for companies like eBureau and TARGUSinfo. 

On the other hand, however, I believe it is probably the most over-hyped concept as of April 2008 give the reality of the lead buying universe.  The VAST majority of lead buyers are just not there yet.  They’re not even close – they’re still working on 101-level practices such as using a Lead Management System and considering Hot Transfers instead of raw Internet data leads for their sale professionals.  Lead Scoring and segmenting is not rocket science, but it is high science.  But this reminds me of my recent post regarding the Art vs. Science of Leads and Lead Generation.

Here’s where I am bullish, however.  Many lead buyers will ask companies that provide lead scoring services, “OK, if I start scoring leads today, what do I with the information tomorrow.”  Business process re-engineering can be extremely valuable, but it’s typically slow and risky as well.  However, a company can glean IMMEDIATE value by putting leads into three scoring bands.  The top-tier scores should go directly to the sales professionals immediately – they will convert the best and allow sales professional to remain extremely productive.  The bottom-tier scores should go right into the trash can.  Their probability of converting into a sale is so low, that there’s no sense in anybody even touching them.  Perhaps the lead buyer would ask the lead seller for credit on those leads, but my instincts is that the credit policies of most lead sellers today is definitely not ready for those conversations yet.

The middle-tier scores (those that aren’t quite good enough to go directly to a sales professional, but better than a trip straight to the trash can) should go to DoublePositive in real time.  In real time, we will attempt to make contact with the consumer, ask them up to three qualifying questions, and then transfer the live, genuinely-interested, and qualified consumer to a sales professional.  We would charge the lead buyer on a per-transfer basis.  DoublePositive is able to “squeeze more juice” from these middle-tier leads through the use of technology, process, and much lower-cost labor than the valuable sales persons’ time.

DoublePositive has some terrific case studies of our customers using this exact approach to lead scoring and segmenting, including a unique relationship we have with Cole & Weber.
 

Short Presentation by David Wengel (GM of Interactive Markets at TARGUSinfo)

Dave Wengel provided a brief presentation on TARGUSinfo, mainly to announce their new lead scoring and lead segment platform offering, LeadAdvisor.  
 

In the Spotlight – Company Showcase

Moderator: Saar Gur, Partner at Charles River Ventures

This was a great idea by Jay to have fresh-idea startup companies submit their short pitches to judges.  I was in an out a bit and did not catch every company’s full presentation but the one that had me scratching my head the most was Glam Interactive.  Sorry ladies, maybe I’m missing something, but it looks to me like you setup a social network of females working in the interactive space using the Ning platform and it’s now up to 600 members.  I’m not sure that’s a business.  At least I’m not sure I heard what the business model is.

AdReady, on the other hand, blew me away (and many others as well).  They gave a fantastic live demo of how to setup a display advertising campaign with the same ease and elegance of setting up a Google Adwords campaign, with the ability to name your price (CPM) and your network (currently limited to RightMedia, Yahoo, and Google (presumably the Adsense publishers that have enabled display ads)).  I’m going to watch these guys very close.  What they’re doing is really slick and is an excellent complement to the slew of display ad exchanges and meta exchanges that are cropping up everywhere.

I tried not to pay much attention to technologies that connected two parties who are un-known to each other at the moment using just software.  While tempting for our DoublePositive business from a cost-containment standpoint, we’ve never quite figured out how to make 100% of consumers or hot transfer-buyers warm up to computers talking to them.  I hope that we do some day, but it’s probably not this decade.  Companies such as eStara, Voicestar, Who’s Calling, etc. would probably agree with me when compared to performance of live human contact.

LeadsCon Blog Coverage Table of Contents:

Rick Bentz, SVP Research & Analytics, Datamark, Inc.
Gary Cornick, CEO of Decision Tree Media, Inc.
David Dowhan, SVP Online Markets at eBureau 

This panel made me think more than once about my post long ago about quality, quantity, and cost.  Before the Internet, direct marketers relied heavily on direct mail and telemarketing.  Mailing to or calling the consumers with the highest probability of conversion into high-value sales was the primary driver, which meant modeling and scoring the list.  Companies such as Capital One and First Equity Card have generated unbelievable profits by modeling and scoring consumer data. 

In the early years of Internet leads, the quantity of leads was relatively low, the quality was relatively high, and the cost of an Internet lead ($10 – $100) was substantially greater than the cost of a cold consumer data list (which cost perhaps $0.01 – $0.50 per record).  Thus the need for and desire to model and score leads was virtually non-existent.  Fast-forward to 2008, and the quantity of Internet leads being generated is excruciatingly high, and the bands of performance of these leads has broadened tremendously. 

This panel was based upon the premise that all Internet leads that are being generated absolutely are not created equal, and that the methods for modeling and scoring consumer data from the offline world ports over very nicely to the Internet lead world.  In fact, these days, the function can yield even better results since 5 or 6 fields of consumer data (i.e. name, address, phone, email) can be appended with hundreds and hundreds of other pieces of data that can make the scoring algorithm much more robust.

During the end of the panel during Q&A, an audience member stood up to make some skeptical arguments about a “one size fits all” score, and that every lead buyer would need their own scoring algorithm.  While I’m certain eBureau would be more than happy to setup a unique scoring algorithm for each and every lead buyer in the world, I was impressed with how David Dowhan handled the answer.  He merely pointed out that some (if not most data) that gets appended to a lead, can have a profound impact on the predictive nature of a lead score, and is indeed empirical – meaning it does not vary from lead buyer to lead buyer.  He mentioned consumer credit or buying power.  It’s a great point, David.  Doesn’t matter WHO the lead buyer is or what source the consumer came from – if they can’t afford it, they ain’t gonna buy it.

As a side note, I was also very impressed with David in a conversation I had with him in the lobby of the conference.  I too have been preaching that “not all Internet leads are created equal,” which is the business thesis for having started DoublePositive back in 2004.  But David made an example that I had never fully thought through, that even though a consumer that goes through our Hot Transfers is 1. Live, 2. Genuinely-interested, and 3. double-qualified, that not all hot transfers are created equal either.  We agreed to collectively test some theories to see exactly how much predictive variance there is in LIVE Hot Transfers.
 

Uncovering Local Lead Generation

Moderator: David Carlick, Managing Director at VantagePoint Venture Partners 
Peter Adams, President of Matchpoint
Dick Larkin, Strategic Sales at Spot Runner
Paul Ryan, CEO of DoneRight!
Robert Wright, EVP Business Development at ReachLocal 

I did not expect to get much from this panel.  “Local” lead generation is such a different animal than lead generation in the mega-lead-buying verticals (mortgage, education, debt, insurance, automotive, etc.) that I’m so familiar with.  “Local” lead generation is directly going after the $10-$15 Billion per year spent by local advertisers in their local yellow pages.  Thus, “Local” lead generation can span across hundreds if not thousands of “verticals.” 

That I said I was pleasantly surprised as to how incredibly engaging I found this panel discussion.  Of course, all the panelist shared the same challenge of how to acquire customers (local locksmiths, plumbers, florists, etc.) without the 30,000+ “boots on the ground” that are represented by the yellow pages collective sales forces who will go to see the advertisers once or twice per year at their shop and sell them an ad.  Explaining the Internet, clicks, leads, calls, and the economics of it all to this market via telesales does indeed sound challenging.

I was particularly intrigued by Paul Ryan’s liberated view of lead generation to include offline and online channels.  His argument was that the vast majority of local leads were NOT originating on the Internet, and what small pieces of the pie that were are being over-bought by too many local lead gen firms and/or agencies.

I was also really impressed by some of the value-added features that Spot Runner has been adding, including call tracking, data appending, and hyper-demographic-targeting based upon TV media buys.

I was also impressed to learn of the consumer-advocacy angle offered by DoneRight, to function as a vetting mechanism in the fraud-filled area of home improvement and other home contracting services.

This market is big and it’s real.  That said, these early days of this paradigm shift from yellow pages advertising to other higher-tech alternatives must be painfully frustrating to these firms at times.  I know how frustrating it can be to work with a lead buyer spending $100K/mo, so I can only imagine the noise of working with a much less sophisticated customer spending $400 per month.  These guys were all very impressive and engaging speakers.

Other significant players in this space that were not on the panel include Yodle, Leads.com, and LeadStream.
 

Lead Management Systems – Lead Gen’s Killer App?

Moderator: Michael Ferree, Online Marketing Manager, ZipSearch! 

Rick Doyle, CEO of LeadMailbox
Raj Parekh, Founder of LeadROI
Bill Rice, CEO of Kaleidico
Jeff Solomon, CEO of Leads360, LLC 

I found this panel to be one of the more timely and relevant panels of the entire conference.  The panelists were the CEOs of the four most significant Lead Management System providers.  These entrepreneurs are filling a badly-needed void.

Many are familiar with Salesforce.com, a company that has helped to define “Software-as-a-Service” (SaaS), whereby users of the web-based system pay per user per month.  However, Salesforce.com is almost entirely designed for B2B selling environments and is extremely difficult to adapt to B2C selling environment – especially those driven from Internet lead generation.  Bill Rice offered a good analysis as towhy these Lead Management Systems (LMS) should not be tagged as CRM (which stands for Customer Relationship Management).  His argument is that the first two acronyms “Customer Relationship” are incongruent with the spirit of receiving an Internet lead.  An Internet lead is neither a customer (yet), nor does a relationship exist with that consumer (yet).  I found this to be a valid point.

Each of these firms integrate directly into most major Internet Lead Providers, so that leads can be delivered directly into the Lead Management Systems, and then subjected to logical workflow and assignment rules.

The moderator was “Lead Critic” Michael Ferree, who had spent many years on the (mortgage) lead buying side, and recently joined ZipSearch on the lead selling side.

The panel was very vibrant/lively with several smart CEO’s engaging in meaningful (and sometime a bit edgy) debate.  A topic that came up early and often was new features and new feature-sets.  The question was raised, is the more the better?  Is there ever enough?  Leads360 appears to be leading the new-feature-release race, while Rick Doyle described LeadsMailbox as being more of model of only releasing new features that the customers are specifically requesting as customizations.  Bill Rice used the features debate to broaden the argument into whether Lead Management Systems are “boxing in” the users, and thus encouraging less user adoption, not more, which is the goal.  He also took the opportunity to announce a new paradigm (my word, not his) in Lead Management – SalesTwit.  I have not yet visited this site (as I am writing this on my plane ride home), but I remember it being described as using the Twitter infrastructure to liberate the Lead Management user in such a way that they use whatever engagement channel is more ideal for them at the moment, such as IM, SMS, etc.  I’ll be curious to learn more about this idea. 

Bill Rice also stirred the pot a bit as he announced SalesTwit would be free (not sure yet if that means ad-supported or a freemium play or something else), but Rick Doyle was quick to request from all his fellow panelist to ensure that they are getting fairly paid for the great value they are all creating.

I consider these firms to be the heroes of our industry.  For lead sellers to command a higher yield for their efforts, they will need lead buyers to “squeeze more juice” out of their leads.  Moreover, lead buyers will need more detailed reporting on the true performance and ROI of their lead buying, and these systems facilitate both of those things.  Anecdotally, I would say the majority of lead buyers do little or no lead management or lead tracking – some merely print out leads on paper and then hand the paper to their sales professionals.

I made an offer during my panel (and challenged all the lead sellers in the audience to do the same) that DoublePositive will pay Lead Management System’s monthly bill on behalf of the lead buyer (or Hot Transfers buyer, as it were).
 

Hot Transfer and the Latest Advances in Voice

Moderator: Jason Stoffer, Senior Associate, Maveron LLC 

Andrew Coleman, Co-founder of LeadQual
Yours Truly – Sean Fenlon, CEO of DoublePositive
Sam Reed, President of Find Your Customers, Inc. 

So, this was the last panel of the event, and not surprisingly was the least attended.  That said, the remaining attendees were quickly to flow toward the front/center seats and appeared to be quite engaged.  The panel was originally scheduled for four panelists.  Per Petterson (Co-founder & CTO of LeadPoint) was to replace the original assignment of David Sobie (GM of the Education Vertical at LeadPoint), but we were all surprised that LeadPoint stood us up.  I’ll try not to take it personally, Per. ;-)

The panel began with an ounce of accidental comic relief as the moderator Jason Stoffer announced me as “Sean Fenlon, CEO of LeadPoint” to the crowd, to which I quickly asked him to take another look at the sheet.  In full disclosure, Jason and I have known each other for a few years now, but only by phone and email – this was the first time we had ever met in person.  It was a simple mistake – besides, I am nowhere near as good-looking as Marc Diana. ;-)

Jason let each of the panelists speak for a few minutes about their business and the evolution of data leads to live leads.  This gave me the opportunity to go through my well-rehearsed chronicling of how performance-based advertising has gone from CPM to CPC to CPA/CPL and now CPT (or Cost-per-Transfer).

Sam Reed had the luxury of describing many dynamics that are more specifically designed to work well on both the supply-side and the demand-side of his business since Find Your Customers has strategically focused entirely on the Debt Settlement industry.  Conversely Andrew Coleman and I had to describe business processes that could work equally well across all verticals.  We also discussed some of the more notable differences between the LeadQual business model and that of DoublePositive.  DoublePositive has two business model “offerings” – a full-service retail offering (our primary offer in both the mortgage and debt settlement industries), which we bundle in the lead buying in addition to the hot transfers services into one single cost-per-transfer.  The other DoublePositive “offering” is what we call Platform-as-a-Service, where we unbundle the lead buying from the hot transfers services (our primary offer in the Insurance and Education verticals).  Thus, the lead buyer has two cost-centers.  This unbundled platform approach is the sole approach that LeadQual offers, however our respective pricing models are slightly different – DoublePositive offers a price-per-transfer, while LeadQual price per lead managed.  Hypothetically, the overall cost could be example the same.  For example, if it takes four Internet leads to generate one transfer and LeadQual charges $3 per “managed” lead and DoublePositive charges $12 per transfer, the cost is exactly the same.  That said, there are some performance dynamics that could conceivably make one model more attractive to the lead/transfer-buyer than the other.

During questions from the audience at the end of the panel, a lady stood up and identified herself as a lead buyer in the education vertical who has tested Hot Transfers (the “bundled” variety as described above, not the “Platform” approach) from some un-named source.  She described horrible experiences where consumers were on the phone with a call center about something completely unrelated to education (I believe she gave an automotive example) and then the consumers was asked if they wished to speak with someone about furthering their career through education and ultimately transferring the consumer directly to the schools’ enrollment counselors.  All the panelists were quick to point out that that was not our respective business practices and/or business models.  What the questioner was describing was clearly some sort of cross-sell offer.  For veterans in the leads business this is the moral equivalent of the co-reg path.  As the co-reg and other forms of incentive-ized marketing taught us all back in 2002, not all leads are created equal.  And as it applies to cross-sell offers to live consumers, not all Hot Transfers are created equal either.  Hopefully we explained the differentiation to the audience member sufficiently that she will not close the door on Hot Transfers categorically, but will test out an industry leader instead where the results are more valuable by orders of magnitude.

I was thrilled to be on the panel with both Andrew and Sam.  I thought there was a genuine sense of collegiality amongst the three of us.  I also thought that Jason Stoffer did a remarkable job at moderating.  He was very modest in introducing himself as a Sr. Associate for Maveron (Venture Capital) – Jason was one the pioneers in the education space to engineer an internal hot transfers process during his days at Career Education Corp.

My only wish is that Hot Transfers panel gets more front-and-center placement in LeadsCon 2009.  No pressure, Jay. ;-)

LeadsCon Blog Coverage Table of Contents:

• LeadsCon Highlights
• LeadsCon Highlights — Day 1 — Wednesday, April 2
• LeadsCon Highlights — Day 2 — Thursday, April 3
• LeadsCon Highlights — Day 3 — Friday, April 4
• Final Thoughts – LeadsCon 2008 (below)

• Other Blog Coverage of LeadsCon

__________________________________________________

We all owe Jay Weintraub a ton of gratitude for his vision and his hard work in making this conference a reality.  Everyone who attended extracted multiple dimensions of value.  However, when building a tradeshow franchise, seldom is the first year a home run for the founder.  We all need to thank Jay and offer encouragement for him to continue this conference for many years to come with the promise that the bigger it becomes, the more he will be rewarded.  Please feel free to use the comments below to offer Jay both thanks and encouragement.

I am continually amazed at how MAJOR components of lead/marketing/advertising performance are overlooked by even some of the biggest buyers in leads, marketing, and advertising in the world.  Many lead buyers have become myopic in their elevation of “Acquisition Cost” as the ultimate indicator of lead performance.  This is two-dimensional thinking.  Acquisition Cost is determined by calculating the cost-per-lead and dividing it by the conversion rate of the lead into a sale.  If a lead costs $50 and 5% convert into a sale, the Acquisition Cost is $1,000. 

“Acquisition Cost” is veiled by other terms, specific to the respective industry.  In the mortgage industry, Acquisition Cost is “Cost per Funded Loan.”  In Education, Acquisition Cost is “Cost per Enrollment,” in Insurance, Acquisition Cost is “Cost per Policy,” and so on.

If an organization is experiencing an average Acquisition Cost of $1,000, then a new lead source that that yields a $500 Acquisition Cost is twice as good, right? 

Hmmm… oh, really?

Let’s take a closer look, shall we?

EVERY organization that spends money on leads, advertising, and marketing does indeed have an average Acquisition Cost (whether or not they know it or are tracking/calculating it is a different matter).  Those same organizations also have an average number of sales per sales person per month. 

The organization with an average Acquisition Cost of $1,000 may be attracted to an option that promises a $500 Acquisition Cost.  But what if the average sales person who averages 4 sales per month at $1,000 Acquisition Cost drops to 1 sale per moth with a $500 Acquisition Cost.  Is that really a better option?  Not a chance.

Here’s another hypothetical…

Should the same organization with a $1,000 average Acquisition Cost consider a source that forecasts a $1,200 Acquisition Cost (20% above the average?).  Of course not, right?

Hmmm… Oh really.

Let’s take another closer look….

The organization with an average Acquisition Cost of $1,000 may be inclined to avoid a source that promises a $1,200 Acquisition Cost.  But what if the average sales person who averages 4 sales per month at $1,000 Acquisition Cost increases their production to 7 sales per moth with a $1,200 Acquisition Cost.  Is that better or worse?  Better by a mile in just about any organization.

So, why the change in the average number of sales per sales person per month in the examples above?  It’s simple.  Higher-priced options tend to require less TIME to convert into a sale than lower priced options.  Lower-priced options feature lower prices per lead, which may indeed lower acquisition cost, but at the added cost of TIME.

This concept of TIME is a third-dimension that needs to be considered by buyers of leads, buyers of marketing services, and buyers of advertising.  The time dimension can be calculated as a positive or a negative (either one works, but it’s critical to include on or the other).

As a positive dimension, the time dimension means productivity.  In other words, how productive can the average sales person be with each individual option.  Most sales professionals are in highly-paid positions, and their time is their most valuable asset.  As much of their time should be spent selling as possible and the amount of time attempting to make contact with a potential buyer, qualifying the buyer, and determining if the buyer is interested, should be kept to a minimum.

As a negative dimension, the time dimension means cost.  What is the fully-loaded cost of working a lead source?  This extends beyond the price paid per lead, and should include the average sales person’s compensation, the cost of their phone, the cost of their computer, the cost of their connectivity, etc.  These are all sunk costs, and the more deals a sales person can close, the more these costs are minimized in the context of a variable cost structure.

You can use either the positive or negative approach (you can guess which one we’re biased towards here at DoublePositive), but it’s critical to add that 3rd dimension into calculations and decision-making.  To ignore this data is to ignore one if the most influential dynamics affecting your organizations costs and productivity.

Private Equity Week reported this past week that LeadPoint has successfully completed its 5th round of funding.  Below is the report from PE Week:

LeadPoint Inc., a Los Angeles-based online leads exchange marketplace, has raised $6 million in Series E funding, according to a regulatory filing. Backers include Redpoint Ventures, Estalea LP and Breakwater Ventures. The company has now raised over $15 million.

I can attest first-hand that it’s not exactly a friendly market out there right now for fundraising, so I tip my hat to CEO Marc Diana for getting home on the deal.

SPF

I’ve been in the lead generation ecosystem for a long time.  To put that statement into perspective, my previous company, TheLoanPage.com, was launched back in 1997, and I have been trying to drive Internet consumer traffic to online forms essentially since the Netscape IPO.

The three companies I saw establish the biggest beachhead in the early years were Lending Tree, LowerMyBills.com, and Nextag – all of whom went on to build multi-hundred-million dollar business, sell for handsome multiples, and provided a handsome return to their investors.  These businesses sold “leads” as opposed to selling traffic on a CPA or CPL performance-basis.  Since their early respective successes, I feel as though there has not really been a staggering amount of innovation.  There are, of course, some notable exceptions.  Adchemy began in 2004 with the intent of bringing high-science to the lead generation world.  LeadPoint was also founded in 2004 with the challenging mission of become the world’s eBay for leads.  DoublePositive was also started in 2004 with the purpose of pushing Internet leads out to a whole new performance-based delivery model – LIVE Hot Transfers instead of Internet leads.  All three companies have had a substantial footprint in selling to the mortgage industry (similar to Lending Tree, LowerMyBills.com, and Nextag).  But even with the meteoric rise of Education, Insurance, and Automotive and lead-buying industries (in the face of a challenged mortgage landscape), I have not seen a tremendous amount of business model innovation in the space.  Especially in the mortgage industry.  Sparkroom appears to be another exception to this rule.

I first learned of Sparkroom from my friend Ed Powell, a former sales executive with Lending Tree and GetSmart who played a significant role in their early days all the way through their sale to Barry Diller’s IAC.  During his time at Lending Tree, Ed had identified that the single biggest challenge of the mortgage leads ecosystem was the lack of objective and rational decision-making with respect to lead buying and lead performance.  Ed partnered with his friend Jamie and founded Sparkroom.

Jamie and Ed acknowledge that the lead tracking and lead management space was quickly gaining new entrants such as Leads360, Leads ROI, and LeadMailbox, but felt that these companies were focused on CRM functions (as they should), which left a void and an opportunity to focus like a laser on technologies that could facilitate analytics and dashboards with a comprehensive ROI being clearly defined. 

Sparkroom was founded in early 2007, was funded by Matrix Partners in May 2007, but just recently emerged from stealth mode.  My most recent conversations with Ed and Jamie leave me feeling particularly bullish about their direction.  They have added a “services” layer as an option to sit on top of their technology.  Mortgage originators thus have the option of using the Sparkroom platform directly (Software-as-a-Service), or rather engage Sparkroom vis-à-vis an account executive who can directly manage the Sparkroom platform on behalf of the client in order to achieve specific ROI objectives.  In other words, if you goal is to double mortgage loan originations while decreasing your cost-per-funded-loan by X%, Sparkroom can manage this effort for you and do all the work.

I cannot help but see this play as very similar to the “Agency of Record” concept which is most commonly found in the education vertical.  Cole & Weber manages multiple lead sources for Capella.  QuinStreet manages multiple lead sources for Devry.  Up until 2008, Advertising.com managed multiple lead sources for University of Phoenix.  These types of relationships allowed the schools to focus their resources on their core business of education (not Internet marketing).  It looks as though Sparkroom is bringing this same type of offering to the biggest lead-buying mortgage companies, and I would expect, if done correctly, this will be an extremely valuable service.

Of course, I’m always biased toward fellow entrepreneurs diving into a brave new world, but I seldom write a blog post as long as this one unless I feel as though the offering is something quite unique.

Best of luck to Jamie and Ed.

SPF

So, it’s been a while since our last blog post – I guess that is to be expected the first few weeks following an office move.  I have been having lunch individually with each member of the DoublePositive team  as well.  I have crowned the rest of the company as co-CEO during this time.

Internet lead buyers and lead sellers across many industries are buzzing with anticipation this week about LeadsCon.  LeadsCon is the first annual conference with the purpose of bringing together industry-leading companies of both lead buyers and lead sellers.

LeadsCon is the manifestation of a vision of its founder Jay Weintraub.  Jay is a former neighbor – he worked at Advertising.com in his early years, right next door to me during the years that I was growing my previous company, TheLoanPage.com.  Although, I didn’t really get to know Jay until years later – we had sold TheLoanPage.com to Battery Ventures and Jay had moved out west to work for Oversee.net.  Jay began blogging about Online marketing-related and Internet advertising-related issues and trends years ago, and quickly became well-respected for identifying macro-level concepts.  I became a regular reader of Jay’s blog and I sometimes found myself getting lost in my comments to his posts.

I wasn’t the only one who took an interest in Jay’s work.  In 2006, Jay was invited by TARGUSinfo to be the keynote speaker at their first annual Lead Quality Summit is San Diego.  The success of this summit (and the subsequent 2007 Lead Quality Summit in Las Vegas) clearly inspired Jay to extend the scope of this type of event into a full-force “industry tradeshow” (as opposed to a Summit mostly limited to TARGUSinfo customers/partners).  Of course, other larger tradeshows have established themselves for Internet marketers such as Ad:tech and the DMA Annual Conference, but none were filling this specific void.

Ad:tech has grown into a mutli-multi-million dollar event that annually visits 10+ cities worldwide.  Ad:tech has become the most popular of all Online Advertising tradeshows, but this has also become its most noticeable imperfection.  Every Ad:tech show features hundreds of exhibitors, thousands of attendees, and several keynote speakers.  Many professionals involved with the shows often find it over-crowded and diluted by whatever aspects of the industry they may NOT be concentrated in.  Indeed, to be all-things Internet-advertising-related and all-things Online-marketing-related is an extremely broad scope.  Attendees are likely to find infrastructure players alongside mobile players alongside ad networks alongside online publishers alongside direct marketers alongside brand advertisers, etc.  Ad:tech has become an icon, but has also become perhaps best described by Dr. Peter Venkman (Bill Murray’s character in Ghostbusters), “Human sacrifice, dogs and cats living together, MASS HYSTERIA!!!”

By contrast, the Direct Marketers Association (DMA) is an organization that has existed long before the Internet.  Over the past several years, the DMA has broadened the scope of their annual conference to include “Interactive” exhibitors and tracks.   Having attended the past few DMA Annual Conferences, the “Interactive” makeup of this event appears to be less than a third of that from more traditional and offline Direct Marketing.  By and large, the “Interactive” exhibitors tend to be a small subset of the Ad:tech advertisers.

In this tradeshow landscape, a specific segment of the market was being overlooked – specifically those companies involved exclusively in performance-based advertising and marketing (e.g. lead generation companies and Internet lead providers) along with the biggest buyers of performance-based advertising and marketing (e.g. lead buyers).  THIS is the fastest-growing segment of Internet Advertising and Online Marketing according to the IAB (I argue with some of their numbers, but I agree with this fact).

TARGUSinfo was the first to acknowledge this gap and filled it with their annual Lead Quality Summit.  However, Jay Weintraub was the first to create an industry event that was more focused on the lead generation ecosystem as whole that that of Ad:tech or DMA but extended the scope even beyond a customer/partner summit.  Hence, LeadsCon was born.

Anyone who knows Jay agrees that this is the perfect gig for him.  Not only has he become quite the industry luminary with his blog, but he is also one of the more well-connected players in the space.  As a result, the inaugural LeadsCon event was SOLD OUT weeks before the show and the panel/speaker roster reads like a who’s who in the industry.  Jay has even honored yours truly with a spot on the Hot Transfers panel, which closes out the show.  The panel will be moderated by my friend Jason Stoffer, who was one of the pioneers in building a Hot Transfers process in EDU with his former employer CareerEd.  Jason has since moved on to become a Senior Associate at Maveron and is one of the brightest minds evaluating the lead generation space for investment opportunities.

Not surprisingly, we are very bullish about this event.  I will be attending the show along with four others from DoublePositive – EVP Joey Liner, SVP Brian Ocheltree, CTO Syed Zaidi, and our Affiliate Manager, Rich Dent.  If you plan on attending, please come by our booth – we are in eager deal-making mode.

We had considered being a major sponsor of this event, but by the time we got our ducks in a row, our friends at LeadPoint had already scooped up the “Lead Sponsor” package that we had our eye on.  We did jump on the opportunity, however, to be the sponsored advertiser on the lanyards (neck bands) that hold the conference badges.  It will certainly be satisfying to see some of those who consider themselves competitive to DoublePositive wearing our colors and message around their necks.  :-)

A particularly unique panel is scheduled for Thursday and is titled “Meet the All-stars.”  The panel includes:

• Matt Coffin
• Mark DiPaola
• Matt Keiser
• Mike Kelly
• Brendon Kensel
• Chris Moore
• Murthy Nukala
• Ed Ojdana
• Jordan Rohan

LeadsCon officially kicks off on April 2nd at The Palms in Las Vegas.  I expect to remain quite busy and engaged during the show, but I will try to capture and blog some thoughts and reflections on the plane ride back home.

Stay tuned!

SPF