double POSITIVE Marketing Group, Inc.

Post By
Sean Fenlon

Wow.

Jodi’s post is a tough act to follow, but I did promise her that would provide a recap of the marquee LeadsCon panel of LeadsCon Las Vegas 2012.  The panel was presented by Doug Valenti, CEO of QuinStreet, and Tom Evans, CEO of Bankrate – the top two publicly-traded companies in the LeadsCon ecosystem.  The panel discussion was moderated by Stewart Barry, a partner with Investment Banking firm Union Square Advisors.  Stewart has represented several buy-side and sell-side clients in the LeadsCon ecosystem, and was a natural fit for the role of moderator between these two high-octane CEOs. 

In the spirit of full-disclosure, I have met Doug Valenti several times and consider him a friend.  I met Stewart Barry after the panel and found him to be incredibly knowledgeable of the LeadsCon ecosystem and also a wonderful person.  However, I have not yet had the opportunity to meet Tom Evans.

Arguably, the premier session of LeadsCon LV 2012, I characterized this as a “must see” to DoublePositive folks and it did not disappoint.  The discussion almost immediately gravitated to the role of mobile in Lead Gen.  Several oft-cited statistics were presented about the rising tidal wave of mobile usage.  Both CEOs acknowledged that they have observed a recent surge in visits to their owned and operated sites via mobile devices.

As a quick sidebar note on the role of mobile, the only other session I was able to attend was presented by Jeff Lawson, CEO of Twilio.  Jeff is an excellent and engaging presenter and really provided a wakeup call particularly to the mobile marketers and media buyers regarding how to adapt and evolve their call-to-actions to better fit the many different mobile environments.  One screen shot was particularly compelling – a screenshot of how most iPad users are typically leaning back or lying down while using their devices, then followed by a screenshot of a typical web-based long-form with several page-steps and dozens of fields right above an iPad touchscreen keyboard (which doesn’t even include a tab key for the user to move between capture fields).  Good luck getting those forms to convert with iPad users. :-S

Tom Evans segued out of the mobile discussion by making the point that it’s just another way to deliver media.  Tom surprised many in the audience by reminding them that Bankrate is a 28-year-old media company and that he joined the company in 2004 with a strong media background.  Bankrate has been positioned and perceived as a media company more so than a media buyer.  Much of Bankrate’s traffic through the years has been organic search traffic to their owned and operated properties including www.bankrate.com proper.  Organic search traffic tends to leave some in the industry unsettled because of the dominant influence that Google plays with its ranking algorithms for valuable search queries.  However, Tom pointed out that the recent Google updates (aka “Panda 1” and “Panda 2”) were ultimately net traffic gains to Bankrate’s sites.

The conversation naturally flowed to online consumer privacy issues after the mention of Google (given the recent uproar regarding Google tracking online consumers across all of their properties).  I believe Doug Valenti echoed the sentiments of all the white hat players in the audience that greater scrutiny and a better developed policy is needed around this topic of privacy.  The challenge here will be educating the policy-makers around how consumer privacy/tracking works in general and then to translate that into what is good and what is bad for consumers.  Most online marketers fear a brute-force Patriot-Act-style legislation that could severely impact many online marketing business models while providing very little additional privacy or control for consumers.  My personal philosophy is that the key is consumer freedom and consumer transparency.  Make what is being tracked very transparent to consumers while describing the benefits, while also providing the freedom to opt-out and otherwise control their own personal tracking settings.

The conversation then led to a conversation regarding online media in general.  Both Doug and Tom consider their respective businesses to be media companies (i.e. sellers of media, albeit most of it on a performance-basis), even though both businesses are also very active media buyers as well.  In that regard, it was refreshing to hear them speak of the consumers that visit their owned and operated sites as their “customers” and they both care deeply about the engagement and experience of those users.  Too often in the world of online performance-based marketing, the consumers are viewed by marketers as clicks and zeroes/ones on a traffic log rather than humans. 

Tom Evans described an interesting challenge for the whole online media ecosystem.  Traffic to online media is dominated by the big portals and players (e.g. Google, MSN, AOL, Yahoo, etc.).  They are all working hard to command the same rates for their premium inventory as offline premium TV could command.  I believe Tom stated the range to be $8-$15 CPMs.  In contrast to that, Tom identifies the massive amounts of non-premium inventory from these same players and other smaller publishers that are being auctioned off through real-time bidding exchanges in the sub-$1 CPM and often even sub-$0.50 CPM range.  On the other end of the spectrum are performance-based media sellers such as Google or Bankrate selling clicks that net an effective $60-$70 eCPM to the publisher.  Thus, Tom identified the big media companies to be stuck in a strange spot in the middle.  I personally view the continuum of eCPM’s as a simple reconciliation of supply and demand, and the continuum becomes more rational as the market gradually becomes more efficient through value-based pricing and real-time bidding.

Both Bankrate and QuinStreet have been highly acquisitive in the LeadsCon ecosystem as a supplement to their organic growth.  Both CEOs agreed that owning the media (as opposed to buying the media – perhaps “renting” the media is a better term here) is a key consideration of value in their M&A strategies.  Doug Valenti used his recent acquisitions of two B2B media companies (Ziff Davis Enterprise and IT Business Edge) as examples.  If the business that is the acquisition target is not a media company, but rather a network or technology company, the key criteria they use to evaluate the strategic fit is whether or not there could be growth “acceleratation” post-acquisition as a result of the larger platform.  Doug Valenti used the acquisition of SureHits as an excellent example of successfully using this approach.  Both CEOs agreed that as publicly-traded businesses, they had a responsibility to obsess about scalability of acquisition targets, but also to enforce best-practices in the industry and accelerate the transition from the Wild West to well-organized and well-governed business practices.  In other words, there seemed to be very little appetite for businesses that utilized incentives or promotions (or good forbid spyware/malware) as part of their interactions with consumers.  My takeaway was that Wall Street tends to reward businesses that are perceived more as media-owners and platforms more so than media-buyers/renters or intermediaries.

The discussion then shifted to the topic of vertical markets.  This has always been a fun topic since 2007 when hundreds of millions of mortgage lead gen dollars simply vanished as a result of the mortgage meltdown.  Many lead gen businesses then began going to great lengths to identify the characteristics and attributes of the best verticals to enter.  Tom and Doug confirmed a few of the most basic desirable attributes – high-value “considered” consumer purchases, sometimes referred to as “chunky.”  It is interesting to note that both QuinStreet and Bankrate share several vertical markets (e.g. Mortgage, Insurance, Credit Cards) but Bankrate does not operate in several other vertical market that QuinStreet does (e.g. Education, Home Services, and B2B).  Verticals that also reflect desirable attributes that I do not believe QuinStreet or Bankrate have entered – at least not yet in a big or meaningful way – include Health, Auto, and Travel.

The topic of the Home Services vertical invoked some interesting disagreements amongst the panelists.  While QuinStreet has a strong presence in Home Services, Tom Evans was sharply skeptical of the opportunity, citing the lack of “any big business in Home Services.”  When the moderator Stewart Barry politely reminded Tom of ServiceMagic as a very big Home Services lead gen company, Tom acknowledged the example but continued to be skeptical of the opportunity because of the noisy/messy long-tail characteristics of the service providers and contractors (who are also the lead buyers).

The conversation then shifted gears away from vertical markets per se and into various pricing models (e.g. clicks vs. leads vs. calls, etc.).  I was thrilled to hear the position of both Tom and Doug on this topic to the extent that it matches the long-held DoublePositive philosophy.  They both held the position that we are all in the customer acquisition business, and that our function is to deliver net new customers at scale and at target cost.  Thus, clicks, leads, calls (and I’ll self-servingly add Hot Transfers to this list), are just various performance-based pricing models at different stages of the funnel, but are designed to achieve the exact same ultimate outcome. 

Amen. 

I will only add one additional observation from the market that I suspect both Tom and Doug would agree with, that the deeper in the funnel that the pricing is determined yields an inverse relationship to scale/volume vs. risk/challenge.  In other words, the challenge/risk of buying clicks and converting them into sales is greater than that of buying leads, calls, or Hot Transfers, but there is a much greater volume of clicks available to buy in market for those that can manage that risk/challenge.

Tom Evans described the evolution of pricing models at Bankrate.  When he arrived in 2004, they sold mostly display ad inventory on a CPM basis.  Their online rate table product allowed them to evolve into a CPC pricing model that sold clicks.  The insurance vertical acquisitions of InsureMe, NetQuote, and InsWeb pushed them into selling leads on a CPA/CPL pricing model.  DoublePositive is happy to be working closely with Bankrate Insurance which allows Hot Transfers as one of the delivery model options, thus a CPT or Cost-per-Transfer may soon follow.  Tom seemed to suggest a bias for the higher pricing models with his colorful comment during the panel that “We’re still asking people to swim through a lot of swamp water to get to the jet fuel… We charge a lot more for the jet fuel.”

The “jet fuel” metaphor is a good one.  Tom mentioned that a $1,500 total marketing cost-per-funded-loan is still the market average in the mortgage industry.  Most buyers would gladly spend $1,500 for a single click, a single lead, or a single call/transfer provided that they had a 100% conversion to funded loan rate, but that is only hypothetical.  It is the “swamp water” that requires lower blended price points.  In Baltimore, we refer to this as crab-cake filler. :-)

As an extension of this principle, both Doug and Tom agreed that it is still difficult to get end-of-funnel sale or transaction feedback from lead buyers.  This has been a common meme at every LeadsCon, and a common frustration of lead sellers for over a decade.  The buy/sell market will never be as efficient as it can be as long as the feedback loop of true value is broken.  Bridging the gap of this broken feedback loop is a key pillar to the DoublePositive media buying and right-pricing strategy.

At the end of the panel discussion, the moderator allowed a few questions from the audience.  An interesting question from an audience member was regarding the roll of affiliates within their supply channels, especially with respect of both CEOs passion to eliminate bad actors.  Tom Evans responded by stating that his affiliate channel was Bankrate’s least-profitable channel.  The most profitable channel was of course organic traffic from owned and operated sites.  However, direct media buying (where there is no fear of bad affiliate behavior) yielded higher margins than the affiliate channel, thus challenging the myth that businesses utilize an affiliate channel (and the noisy risk of bad affiliate behavior) merely for higher margins. 

The next question was a nice segue.  A representative from Progressive Insurance asked “who pays the cost of these bad affiliate actors?”  The answer shared by both CEOs is that both the lead buyer and the lead seller share the cost.  The lead seller bears the cost by having their performance diluted thereby preventing from securing higher rates in market for the rest of their inventory.  The lead buyer bears the cost by working to a lower blended price per lead (thereby reducing their overall volume) but also wasting operating time/money and emotional bank accounts of their sales force.

The final question from the audience was about International expansion opportunities.  Doug Valenti took the lead on the answer and first set the table by stating that the vast majority of the opportunity for lead gen businesses is still in the USA.  He went on to describe QuinStreet’s international strategy and how it fit into Western Europe and Latin America.  Doug confessed that China is a tough nut to crack given the highly-localized and highly-personalized idiosyncrasies of the culture and the market there.  DoublePositive board member Stein Kretsinger has made several investments into online advertising businesses in China and agreed with Doug 100%.

Overall, I found this panel discussion to be one of the most memorable and enjoyable in LeadsCon history.  I’m hoping that Jay is able to make this inspiring State-of-the-Union style panel an annual affair.  Bravo to Doug, Tom, and Stewart, and Cheers to Jay.

 SPF

Post By
Sean Fenlon

 

Especially in DC, New York, and Maryland.

SPF

 

Post By
Sean Fenlon

I once thought the event in the link below would go down as the biggest blunder in the Internet economy. 

http://blogs.doublepositive.com/2008/05/05/huh-yahoo-rejects-microsoft-bid-thats-ridiculous/

The Yahoo blunder has been bested…

This will CLEARLY go down as the the single biggest blunder in the history of blunders.

Groupon rejected Google’s (increased) offer.

Google pulled the deal.

Groupon wants to go public with their $2 Billion current run-rate in tow.

Readers please remember that this business was FOUNDED in 2008!

The play here is to go long on GOOG and short the Groupon stock right after the IPO.

<sigh>

But let me be crystal clear.

I STILL Love Groupon. :-)

SPF

Post By
Sean Fenlon

A TV show, a movie, and a video game.

All three are seeing huge search query traffic, and one is growing like crazy.  All three also are literally infused with music.  Anyone who types or reads these queries would agree.

Hmmm. I wonder.

Perhaps music is not being abandoned after all.

Perhaps it’s just being re-named. :-)

I’m Glee-ful.

SPF

p.s. I intentionally did not include American Idol on the search query list because the American Idol search query volume is so overwhelming that it would’ve rendered this chart above too-hard-to-read.  I took particular notice of American Idol this year when Harry Connick Jr. joined the team for a moment.  HC Jr. is one of my heroes.  Nonetheless, I do reserve the right to blog about American Idol in the future. ;-)

Post By
Sean Fenlon

Probably an unfair if not misleading headline, but true.

Google queries for “music” are down almost 50% from their highs over the past few years:

Google forecasts the drop in music to extend even further into 2011.

It’s a shame that the live music capitols of the world (Tennessee, Texas, New York, etc.) are leading the way in the drop off.

Maybe this is just one of those “it doesn’t matter what Google data says” search queries, but I doubt it.  I’m definitely biased in the other direction.

SPF

Post By
Sean Fenlon

I love Google.

Honestly and genuinely.  I really do.

Not just because Google has a HUGE impact on my life, and probably yours too.

Let’s be honest.  Like me, you probably touched Google more times than any other brand on this day in 2010.  Google has huge consumer-brand-recognition (likely to overtake the brand-recognition levels McDonalds and Coke over time IMHO).  Their stock price currently values them at $153.12 Billion.  That will go way up as well.

Not just because they think that I am the 4th most relevant wine critic.

Just Google “wine critic” and you’ll see what I mean.  Google actually ranks my recommendations 4th behind Robert Parker and newcomers Gary Vaynerchuk and Steve Heimoff.  Thank you Google.  You flatter me. :-)

Not just because I own their stock:

I bought their stock in late October 2008 at $311 based on some good advice from Warren Buffet.  Google’s stock price has grown over 50% since then to $480.43 (as of today). Margins are fantastic as well.  Ummm. WHY didn’t I buy their stock under $100 per share after their IPO settled down in 2005?  I have no idea.

Not just because the co-founder Sergey Brin and Larry Page is from Baltimore and is a musician respectively.

No kidding.  http://en.wikipedia.org/wiki/Larry_Page + http://en.wikipedia.org/wiki/Sergey_Brin Although, as a fellow Baltimore-based Internet Entrepreneur and Musician, I may be a bit biased on this one. ;-)

Not just because I learned from Google today that there is no such thing as a bad click, there is only a mispriced click.

Actually, this concept originates with Stein Kretsinger during his early years at Advertising.com.  Stein reminds many of the Caballo Blanco character in the book “Born to Run” – a book with amazing characters and stories.  Absolutely amazing.

Actually, I love Google because Google visited DoublePositive today.

A wise legendary online marketer once told me that you aren’t anyone until Google knows who you are.  Check that box as of today, and after a DoublePositive Board meeting no less.  Thanks to @ttzqq24 @PitVaidya – you too Chris.  I was amazed to see Google workers using Apple, Microsoft, Dell, and IBM products, but it makes sense.

I have actually loved Google long time before today.  There is a whole section dedicated to Google on this blog after all. :-)  Just check out the Categories on the right. http://blogs.doublepositive.com/category/google/

Cheers Google.

You make us all better in life.

SPF

Post By
Sean Fenlon

Who?

What?

When?

Where?

How?

Sometimes Why.

The questions above are used by journalists to capture all the most significant information about a story.

Why?

Why is on the list too because I wish to emphasize its double-meaning (i.e. “A,E,I,O,U, and sometimes Y”)

Let’s see what Google thinks about these questions vis-a-vis auto-suggest:

 

Who?

What?

When?

Where?

How?

Why?

Post By
Sean Fenlon

Earlier today, during a DoublePositive pizza lunch, I asked my fellow lunch-mates to name their favorite movie.

Wait. “Favorite” or “Best” they asked.

Good question.

Here’s my best/favorite list of all time:

1. The Wizard of Oz
2. West Side Story
3. The Sound of Music
4. Star Wars
5. Empire Strikes Back
6. Amadeus
7. Back to the Future
8. Raiders of the Lost Ark
9. Rocky
10. The Karate Kid
11. Ferris Bueller’s Day Off
12. Caddyshack
13. Hitchhiker’s Guide to the Galaxy
14. Jackass 2 The Movie
15. Borat
16. The Holy Grail (Monty Python)
17. Goodfellas
18. Dumb & Dumber
19. Jerry Maguire
20. The Great Escape

Honorable Mentions

1. Pulp Fiction
2. Memento
3. Exorcist (not a “favorite” in the classic sense but always in awe)
4. Exit Through the Gift Shop (still in theaters)
5. Blade Runner
6. Ghostbusters
7. Fight Club
8. Rain Man
9. Raising Arizona
10. V is for Vendetta

I was curious to scrub my subjective picks against a more objective source.  I decided to use the American Film Institute’s Top 100 list as the objective source:

http://en.wikipedia.org/wiki/AFI’s_100_Years.100_Movies

But I completely disagree with their Top 5 films of all time.

I just checked my theory with Google Insights.  It appears I’m right. :-)

SPF

Post By
Sean Fenlon

It was a pleasant surprise to come to work today and see a late-night conversation I had at LeadsCon East 2010 with my friend Mike Ferree reflected on his blog.

Mike’s LeadCritic blog has blossomed in parallel with the blossoming of the LeadsCon franchise.  While chatting, we were reminiscing about how far the Lead Generation space has come since the first LeadsCon in 2008. 

But before LeadsCon there was the (now almost forgotten) UN-conference Leads2007.  And before Leads2007 the progressive visionaries at TARGUSinfo had launched their annual Online Lead Quality Summit (now re-named Interactive Insights Summit).

After the 2nd TARGUSinfo Summit in 2007, I remember being amazed by how different people used different basic terms (such as “lead” or “click”) to mean different things.  It prompted me to write a blog post titled “What is a Lead, What is Lead Generation”:

http://blogs.doublepositive.com/2007/09/24/what-is-lead-generation-what-is-a-lead/

I have always been of the mindset that there is no such thing as a “Lead Generation Industry” per se.  I believe that the Lead Generation ecosystem is actually a subset of the ADVERTISING industry, and that buying and selling on a per-lead basis is actually buying and selling performance-based advertising.

I tried to provide a history of the Advertising Industry evolving to Performance-based Delivery Models in a blog post written in June 2007 titled “Online Performance-based Marketing Overview – Part I” (I never did complete Part II but that is a different story ;-)).

Despite my blog-based lecture and the early tradeshows, in 2007 there was still a great deal of confusion around even the most basic terms and concepts such as clicks, leads, and lead generation.  Here’s a quote from my experience at the TARGUSinfo Summit in 2007:

A conversation I had with the CEO of a major shopping engine was referring to an Internet user “clicking” on a link to visit a the site of an e-commerce retailer as a “lead.”  I found that rather strange use of a the lexicon – we have always referred to such a phenomenon as a “click” and pricing models are this type of user action are typically Cost-per-Click (CPC).

My confusion was compounded when I witnessed a panel-discussion about “lead quality,” but the advertiser on the panel only paid out when a sale occured:

Later in the day, ValueClick and Scholastic, Inc. gave a case study of how offers made for Dr. Seuss books in a co-registration environment resulted in completed “sales.”  However, in the PowerPoint presentation, they referred to the completed sales as “leads.”  We have always referred to transactions that are fully-completed online as “sales” and this type of user action are typically priced as Cost-per-Sale (CPS).  Another way to support this position is to think of yourself as an advertiser that ONLY pays the advertising cost when a sale is completed – I don’t think you’re too concerned with “lead quality” since the quality is essentially perfect every time you are asked to pay.

I summed up my frustration by defining the absolute differences between a click, a lead, and a sale:

A lead is NOT a click.  A lead is NOT a completed transaction.

A lead IS a consumer’s “Expression of Interest” in a product or service offer.  Using this definition, an “Expression of Interest” is typically represented by an action or form-fill process (anywhere to 1 field of contact information such as an email address to dozen of fields of information).

Of course, if there is confusion amongst simple terms/concepts such as clicks, leads, and sales, you can imagine my frustration over the past 6 years with a market that tended to conceptualize a LIVE Hot Transfers as nothing more than a very expensive lead.  We even designed a special diagram to illustrate the distinct difference of each method of buying and selling.  Many of you may have seen this slide before because we use it every chance we get:

In my conversation with Mike at LeadsCon, we both agreed that while the space has matured (and the tradeshows have grown), there is still a great deal of uncertainty and confusion in the meaning of words we use everyday in performance-based marketing.  As a strong industry advocate, Mike decided to use the voice of his blog to try galvanize a lexicon and thus improve communications across the industry.  I admire him for that and I hope that I can aid the effort.

It’s a simple concept but one worth pounding on over and over.  I like to work backwards from the demand-side of the equation with the concept that ALL leads cost money but only some will actually make money. 

At the end of the day, a consumer buys a product or service or they don’t. It’s absolute.

However, there are other absolute milestones along the way… was a consumer presented with an offer or weren’t they (CPM)? Did they click on the ad/offer or didn’t they (CPC)? Did they express interest by taking an action or didn’t they (CPA/CPL)? And my personal favorite… did they agree to be transferred and speak to a sales rep or didn’t they (CPT)?

Of course there are countless dependencies and nuanced correlations in the shades of gray in between those milestones that can be analyzed and optimized, but I feel as though identifying the absolute milestones in the wireframe of a sales funnel is Step 1 and Position A.

EPILOGUE:

In Mike’s post, he playfully refers to me as “Maestro,” presumably referring to my academic music background.  While I’m dubious the new nickname will stick, I had to share the irony that I just recently completed a BUSINESS book titled “Maestro.”

This short book by conductor Roger Nierenberg uses a symphony orchestra as a metaphor for any dynamic organization (business or otherwise).  He describes “The Music Paradigm” for developing organizations.  I found this book to be 100% consistent with my experience in symphony orchestras and dynamic business organizations – I highly recommend it.

If, however, you are more of a viewer and less
of a reader, this TED presentation by a different Maestro Itay Talgam touches upon many of the same concepts and tenets.  It’s an excellent video presentation with a wonderful final example of world-class leadership by Leonard Bernstein beginning at about 19:00.

If you love something, give it away.

Cheers.

SPF