Lead Generation & Quality

nvanprooyen

nvanprooyen

Fortes Fortuna Adiuvat
Dec 8, 2008
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Orlando, FL
A discussion in another thread made me think of something, so I figured I would split a new one off for discussion. I'm going to preface this by saying that I'm not in lead gen at all, so chances are I might be way off here...but here goes anyways:

Everything I've heard about lead gen says that the space is full of fraud, shitty quality, excessive scrubbing etc, etc, etc.

I'm sure that the CPL payouts are lowered quite a bit to mitigate risk of fraudulent / low quality leads. This in turn, makes it harder for affiliates to generate good quality leads for these programs because they can't do it profitably. Advertisers scrub. People get pissed. Networks often get left holding the bag. And the downward spiral continues.

So my question is this. Would it make sense for a new network to come along that specializes in lead generation and nothing else...and structures things like eBay did w/ their ACRU payouts? A big range of payouts based on lead quality. Granted there are likely private offers that exceed the street price which helps out a little bit, but likely not in the kind of ranges I'm talking about.

For example, if you send bullshit education leads by tricking people into enrolling into school from job search traffic, $0.50 / lead. If you send highly qualified traffic that converts into students 50% of the time, $100+ / lead. Start at the bottom tier, work your way up. This will weed out a lot of the bullshit too...again, same way EPN works.

I guess on the back end that would be kind of difficult to manage, because you need to trust the advertiser to assign appropriate quality scores per affiliate. Also I guess it would take a CRM or something to track the conversion process since a lot of it would likely happen offline.

Probably some pretty big technical hurdles to jump over, but it sounds like exactly what this space needs.
 


The kind of payouts you're talking about are def. feasible. A lot of our lead gen offers are with direct relationships so payouts can be structured based on quality. This is generally tough all-around but we work on those terms. PM me if you'd like to dive into lead gen offers that payout big.
 
Actually there is a CRM that can do this in the EDU space, I forgot what it was called but I have their business card around here somewhere. But I'm sure the bigger guys in the lead generation industry have their own custom setup for tracking leads based on which affiliate sent them.
 
I've said it before, but if you're driving quality traffic to offers and getting paid on the lead end, you're probably getting screwed. Singlesnet offers lead pricing adjustments depending on quality, and other offers (foreclosure search offers, online fax services, online conferencing, and formerly the music subscription industry) offer programs where there's an upfront lead payment + an additional commission if the sale is made.

There are some niche players/lead brokers/networks that do this sort of thing, but nothing that I know of combines multiple verticals with the same concept. If you're able to push volume and quality traffic for a certain vertical, always contact the advertiser to see if you can work on a per-sale/activation/confirmed lead/whatever basis rather than a lead basis, and see if you can make more money. It lowers the advertiser's risk, and gives you a potential chance to earn more.
 
Your idea is a pretty good one. We actually have it in practice with a few of our pubs. They're getting significantly higher rates on some campaigns from some merchants because their quality is stellar.

Unfortunately, I think implementing it on a wide scale would not work. Beyond technical reasons (some merchants can't even get sub-ID tracking working properly!), the implementation would be too easy to get around. Here's what I mean:

To begin, the start price would have to be somewhere around the middle. Starting at the bottom rate and working your way up would make it very tough for affiliates who are just picking up the campaign to compete with affiliates who've been running the campaign for a while and who've earned a higher rate. So you'd need a middle of the road payout and then work up/down from there, or you'd really never have any new affiliates pick up the campaign.

Second, mererchants rarely want their campaigns to go exclusive with one network. Even when they do, they don't prevent their offer from being rebrokered. So, their campaign shows up on a few dozen networks. The start price at each network would be the middle of the road price. As soon as an affiliate has their rate dropped for quality, they'd pull their links from network A and move them to network B. This already happens all the time.

The real solution here is to get merchants to check their data in a more timely fashion. All too often merchants sit on their data for a few weeks/months, then look at it and go WTF?!, take a shit on the network and pull their campaigns. If more merchants were proactive in checking quality on the leads they are given, fraud wouldn't be as big a problem because bad pubs would be caught within days, instead of within weeks. Yes, the bad pub would move their traffic to another network, but if they were caught within days there too, they'd quickly run out of places to go.

Many of our merchants are already doing this, but it isn't across the board. I think getting it across the board would go a long way to eliminating a lot of the fraud in this business.
 
MaxSteve said:
To begin, the start price would have to be somewhere around the middle. Starting at the bottom rate and working your way up would make it very tough for affiliates who are just picking up the campaign to compete with affiliates who've been running the campaign for a while and who've earned a higher rate. So you'd need a middle of the road payout and then work up/down from there, or you'd really never have any new affiliates pick up the campaign.
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I can see that. There probably should be some "benefit of the doubt / grace period" tier so new affiliates actually sign up and try to drive traffic. Part of the risk I guess the advertiser would have to wear with new affiliates.

Second, mererchants rarely want their campaigns to go exclusive with one network. Even when they do, they don't prevent their offer from being rebrokered. So, their campaign shows up on a few dozen networks. The start price at each network would be the middle of the road price. As soon as an affiliate has their rate dropped for quality, they'd pull their links from network A and move them to network B. This already happens all the time.
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I've been on the advertiser end of this too, so I definitely know what you're saying. The whole point though of having a network that specializes in this kind of model, is to get exclusive deals. It's part of the value prop. Want to go to Clickbooth and run a campaign there? Fine, come back licking your wounds to us when you get fucked on a bunch of bullshit leads. Give people a great ROI and as strong as the temptation is to go to another network for more volume, you'll always have their business. And the good pubs would run through you too since that's where the money is. The fraudsters wouldnt make shit because of the lead quality monitoring. Natural selection.

The real solution here is to get merchants to check their data in a more timely fashion. All too often merchants sit on their data for a few weeks/months, then look at it and go WTF?!, take a shit on the network and pull their campaigns. If more merchants were proactive in checking quality on the leads they are given, fraud wouldn't be as big a problem because bad pubs would be caught within days, instead of within weeks. Yes, the bad pub would move their traffic to another network, but if they were caught within days there too, they'd quickly run out of places to go.

Many of our merchants are already doing this, but it isn't across the board. I think getting it across the board would go a long way to eliminating a lot of the fraud in this business.
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Great observation and I agree. But, we both know getting advertisers (who often dont know what they're doing) to do this is probably a pipe dream.

But then again, my vision of a network that absolutely nailed lead gen, weeded out the shit and had the best retention and payouts in the industry probably is too.
 
This is esentially what we do at Lead Creations and probably what other lead buyers do. We set a benchmark price, monitor conversions and then vary the prices each publisher can get according the value of the leads. Johu is partially correct in the statement that CPL is worse that CPA, it generally is but in my experience (I buy UK leads for Money4Gold) affiliates generally prefer the CPL model since it's easier for them to monitor the lead volumes they are generating (they don't need to trust the advertiser reporting conversions) and they get paid more quickly, since they don't have to wait for a conversion. I work with publishers on a CPL and a CPA basis and because I monitor the leads and conversions closely I can avoid the pitfalls of suddenly sitting on 1,000s of crap leads. I can advise the publisher before things get out of hand. I think the key to working on lead-gen is to have a close relationship with the advertiser and not to be afraid to ask, how the leads are converting, how long they "sit on them" and what they do with them.
 
nvanprooyen said:
For example, if you send bullshit education leads by tricking people into enrolling into school from job search traffic, $0.50 / lead. If you send highly qualified traffic that converts into students 50% of the time, $100+ / lead. Start at the bottom tier, work your way up. This will weed out a lot of the bullshit too...again, same way EPN works.
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Too subjective. The way it needs to work is multi tiered based on action. For instance. Let's take the dating niche:

CPA For Profile Signup: $3-$4
If the user then signs up for a paid membership advertiser gives % of the first month = 50% time $24.95/mo = Additional $12.50 to the affiliate for a high quality paying lead.

This way the affiliate can make some money up front but even more if they are a QUALITY lead.
 
Realistically what happens is the advertiser or network will just payout whatever they feel is competitive with other offers for lead gen on the market just so they get tracktion. There is no lowered or tiered payout for leads in my opinion since there is so much competition out there. The advertiser safe guard for lead gen is they can fire off the pixel whenever their system verifies the lead and it fits criteria to resell the lead for top dollar and scrub the rest. This is what goes on in the debt game and the mortgage game. The key is to get control of the pixel.
Your model although sounds good in reason but will never go down because with advertisers once they see who the top affiliates are and where the good traffic is coming they will just cut off the shitty affiliate and pay a little bit more for the good affiliate and then scrub the shit out of him as well and make bank.
 
There are networks out there that work on dynamic CPA's. A lot of the lead gen advertisers simply sell the leads to a person for, lets say $40. They give a CPA of $15, and they figure that the lead buyers will deny a 1/2 the leads meaning they are getting 40$ every 2 leads = $5/profit.

I know that there are various medical / lawyer CPL's that have massive CPA's - and they are monitored so damn closley it's sickening. I have some on EWA and when someone send 5 leads, with 1 being bogus - I was already hearing it from the advertiser.
 
Good on paper - doesn't work in real world. 7 years ago, talked about the same in mortgage lead gen.

The new generation of that is all the "lead scoring" companies. But not sure that is working out that well either.
 
Why not look at it from another perspective? Why not get network owners to try and eliminate fraud as much as possible on these offers, and as such the advertiser should be happy to pay out a higher rate to everyone in general in exchange for quality traffic.

Yes, I realize it's not very feasible, especially not with the larger networks.

But take C2M for example. A lot of their offers require manual approval, especially outside of the rebill arena. That by itself should get a good chunk of the potential blackhatters/shitty traffic runners to go to another network. Automatic traffic quality increase for the ones that apply and get accepted. Plus, the C2M crew might get lucky and catch a moron actually stick in the comment section: "want to run this with my software doing se1 and se2." Another potential shit traffic affiliate gone. This is only one way the networks can help ensure they've got good quality traffic coming in.

Yes, granted, there will still be variations in the quality of traffic driven by individual affiliates, but at least this way the bar is set higher for everyone, and everyone gets better payouts from the get-go.
 
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