Not a big surprise, really — Root shuts down its lead generation exchange. At one point there were a lot of really awesome, capable people there.

Thought this was an interesting post from LeadCritic about exclusive leads.

Of course, I am not spending all my time thinking about lead generation topics, but from time to time I do like to revisit these fun things. I don’t have much time to blog these days - things are very very busy right now, so apologies to all with whom I’ve not been in touch as frequently. More news will be forthcoming soon!

Congratulations to Alicia and the team on the latest round of funding! It’s a great space to be in and Consorte is poised for great success… visit their website to learn more!

More bad news from Citigroup. There’s a lot of cleaning up still to do in this market… online too.

I clicked over from a story on LeadCritic about an ABC News piece that featured Marc Diana of Leadpoint. Check it out and see what pre-roll video ad you get, because I got the weird one I screenshotted below, for Playtex bras. WTF? And the best thing about it - no way to skip the ad or even pause it! All I could do was mute it… how excellent these publishers are at knowing their audience eh?

Looks like Lead Critic has picked up on Root Markets’ media buy or partnership or whatever with Yahoo!, indicating that Root is paying for the advertising space. What a shame - I’ll bet the clickthrough and conversion rate on this creative were pretty woeful; it appears to utilize none of the best practices that companies like NexTag, LowerMyBills, Adchemy (Ratemarketplace) and others have spent years and millions of dollars discovering, including the rather obvious “Apply Now” mistake.
I didn’t get to see the landing page user experience, so I won’t comment on that but I reposted the image from Lead Critic of the creative, so you can get a quick sense of what they’re talking about.

I was surprised to see the now-ubiquitous LowerMyBills “win the lottery/ fake ranking/dropdown” ad employed by someone with a brand other than LowerMyBills — namely long-time LMB partner, InsWeb. If you click through this ad (seen on Yahoo! news) you end up on Insweb’s site, with a partial LowerMybills header. It looks like InsWeb is basically just borrowing the LMB creative tactic. Interesting, wonder if we’ll see other deals like this, and how they will evolve…

Apparently, Housevalues is cutting 12% of its staff and exiting the mortgage lead generation and “other noncritical businesses” according to this wire article. This is the old LoanPage business which they acquired two years ago. Their leads lately were of fairly middling quality by all reports, and in a very competitive commodified space, also-rans with big operations are going to drop out… the big operators and the mom-and-pops and/or guys with very very low overhead will remain.

The New York Times has a

very informative article

about LowerMyBill’s ubiquitous silhouette ads including an interview with one of their designers. Very true to form for companies in this space who are very protective of performance data and any degree of proprietary advantage in such a commodity space, LMB issued warnings to her about disclosure of confidential information etc. etc. as mentioned in the article.

Yes, some of you may not like them but the fact that they are everywhere on the Web means that they are working very well for LowerMyBills, astute online advertiser that they are. LowerMyBills (LMB) is one of the smartest advertisers out there and religiously tests the various elements of the ads they are running - they’ve made several “theme” transitions over the last few years based on what has been working best for them (remember all the dancing and stretched-out animals?) and are currently in this phase where most of their ads are using dancing figures, drop-down menus and cursive headlines. Once you try out a few different things and figure out what works, go with that, but always leave the door open for new things to be tested and to take over. LMB does it very very well!

According to Leadpoint’s homepage, they’re “doing it again” in running on MSN’s homepage today, November 8th, 2006 (though ostensibly it is another company that is helping them do this, and not Leadpoint per se as they really have no consumer-facing brand save for SecureRights as an ingredient brand). The ad is indeed on MSN under the brand name “Help me Find”. I am sure they will do quite well thanks to all the election coverage today! BTW I noticed earlier that Yahoo! News’ site was collapsing, if not under the strain due to some technical issues ~ the page was rendering incorrectly in Firefox and there were some missing pages as well.

Here’s the press release from Leadpoint (thanks Josh) talking about the large number of leads they generated partially thanks to the MSN front page placement I talked about on 10/14. I’m guessing they lost money on this placement, especially given (as I mentioned) that they were cutting back on leads from affiliates during that time period.

In the release, Leadpoint claims they estimate $100mm in funded loans which if we assume a $200,000 average loan amount and 25,000 leads (which still sounds a bit high to me for this placement) that would be a 2 percent conversion rate from lead to funded loan. Which then also says to me that the 25,000 leads are really 25,000 ‘matches’ (which would mean something like 7,000 to 10,000 actual ‘leads’ probably depending on the number of overlapping order profiles and hence match rate).

When I was at LinkedIn and working on some of our jobs-related advertising, I would visit sites like Monster.com or SimplyHired.com now and then for research purposes. I had not visited Monster.com in some time, but know that they have been pushing a fair amount of resources into the lead generation area.

I visited Monster.com today and frankly was quite taken aback at how aggressively they are pushing not only advertising but more so now, leadgen offers on their site. I typed in a search query, and instead of being taken to a results page, I was first taken to a form page interstitial with “Special offers” so I can “be prepared for my job search”. In fact, the navigation at the top of the page goes: Job Search -> Special Offers -> Job Search Results. Yes, forget about the job for a minute - job seekers need to go fill up on some of them special offers first! The co-registration offer page I visited had great offers like VistaPrint’s much-maligned free (meaning shipping costs) business card offer, get a credit report, free trade magazines and my favorite, a $15.97 annual subscription to Psychology Today magazine(!).

Upon clicking the (small) no thank-you button you actually get to the first page of search results. Surprise-surprise though, click through to page 2 of the search results and you get another lead-gen offer page - this one dedicated entirely to one of the online education firms. While somewhat more relevant to many job-seekers, and certainly lucrative for Monster this offer is another annoyance. Now one has to really ask whether this extremely aggressive advertising/lead-generation model is too short-sighted (as many of these models are), and if this and the already obnoxious over-advertising model (at least 15 different ads on the search results page I visited) will irreparably harm Monster to the benefit of aggregators who can grab commodity job-listing content for free and arrange it in a smarter, more-consumer friendly way. My vote is “yes” — how precisely and when are the only questions. Monster won’t go away, but the online job market is the truly enormous online lead generation model that hasn’t come close to being cracked yet.

Update: It looks like I was partially wrong — Savings.com IS bumping down affiliates but it’s actually RateMarketplace running on the front page of MSN. RateMarketplace is a site operated by Adchemy, and utlizes the Leadpoint network as well. Sounds like Leadpoint has been push hard to get buyers for this placement. Interesting stuff… this a nice model if it turns out to work.

—-
Apparently Savings.com is the latest mortgage lead aggregator that is going to be running on the front page of MSN.com, on this coming Monday. These front page spots are, as you might imagine, very very expensive, are a one-day deal that has a ton of traffic and are hard to come by (sometimes there are late cancellations…).

I know LowerMybills and LendingTree, even NexTag as mortgage lead guys but who is this Savings.com company you might ask? Well, Savings.com is a B2C “save money” company mainly focused it appears on Mortgage and is a sibling of Leadpoint’s. Leadpoint is a company based in Los Angeles that has created a special kind of mortgage affiliate program slash marketplace, not dissimilar in many ways to the Root Exchange for mortgages that Root Markets (my former employer) has created though not quite as transparent. Still, as an outside observer they seem to be doing decently and have some traction in the marketplace. Though they are separate outside-facing businesses, Savings.com utilizes the Leadpoint network and shares DNA, technology and employees with both Leadpoint and the “high tech holding company” upon whose technology it is built, Estalea. A quick LinkedIn search confirms some employees working at all three firms currently and the privacy policy addresses for Estalea and Savings.com are the same in Santa Barbara.

Coming back to the big MSN placement - Savings.com is trying to establish itself as a big media buyer in the space and put itself on the map as someone that can drive a lot of high-quality volume. Savings.com/Leadpoint is probably understandably anxious about being able to get enough lenders signed up to take leads on this day, and so they’re no doubt pushing hard on lead buyers to increase their caps and take more lead volume in exchange for lower lead pricing. The other thing though, is that they’re probably dialing down other marketing efforts for that day. This is largely confirmed by the email that was forwarded to me they sent out to their CJ affiliates. Here is what it says:

Please be advised that we will be running some large promotions and making some additional updates to our site beginning Sunday, October 15th and wrapping up Wednesday, October 18th. Due to this, we will not be accepting more than five (5) valid mortgage leads per day through that time period from our active affiliates. If you have not been active with us for the last seven (7) days, we will not be accepting mortgage leads for that time period. We apologize for any inconvenience, and we appreciate your understanding.

The Savings.com Affiliate Team

The point of my tale here apart from illuminating some additional players in the online lead generation space, is that it’s difficult to ratchet down spending in your online media channels. Turning off Google or Yahoo! keywords is pretty easy; stopping graphical ad campaigns is more difficult but can be done based on your relationship with publishers, but scaling down affiliates is a tad more difficult. It’s often non-trivial for these guys to pull your offer off their site and even worse, they might drive some leads that then they don’t get paid for, or decide to switch to another affiliate partner and never come back. The other thing to keep in mind here is that this is a partial admission that these affiliates produce lower-quality leads than the front page of MSN will — and Savings.com is probably making big promises to lenders about high-quality non-affiliate traffic on this day.

There is much more here to discuss on the price-quality issues, the impact of big media placements on lead generation, and so on. But for now, I will watch the results and the ripples eagerly as the week develops. Good luck to all.

Has the long, dark tea-time of the New Internet begun (a wake-up call if you would)? Perhaps we should call it “Monetization 2.0″. I saw Kiko just sold on eBay for $258,100 (reddit page) since its founders wanted to work on another project. No clue who bought it and what their intentions may be, but we can only hope it is someone who knows how to make money out of what seems a useful if not unique service. I read Jay’s ‘Bubble 2.0′ DM post and commented that now is the time for the performance marketing folks to seriously look at creating some “mashups” with the looking-for-a-business-model Web 2.0 types. And I really don’t mean putting some Google adwords or banner ads on the site: I actually mean some integrated, novel, user-focused advertising products that will generate $$$. I have some pretty good ideas on this, so if you are in one or the other camp feel free to contact me (rob at this website’s name) and let’s talk.

About 6 weeks ago, I actually filled out a mortgage lead generation form as a result of a spam email message. I used a real phone number that I have access to, so I could track the calls (which is the primary follow-up mechanism for lead buyers in this space). The website was unbranded — pretty much just data capture with some of the same promises you’ll find on above-board mortgage lead generation sites like LendingTree, NexTag, LowerMyBills et al.

I will be writing a full account of my experiences as a lead generation guinea pig over the course of this series, but in the course of this experience I’ve had some very disconcerting customer experiences that really shed light on the need for customer relationship management software among lead buyers, specifically small and medium-sized mortgage brokers and banks. There appears for many of these people to be very little accurate context: in some cases the telemarketers are given just a name and a phone number and in others they are privy to the full contents of the lead. One of the most eye-opening things is that for just about every one of the firms that called me, when I asked where they got my information from, they said “you must have filled out a form on the Internet”. And of course they then launched right back into the pitch. When I drilled in deeper and asked to find out exactly where my information came from I either got:

• “Transferred” to a supervisor, but actually hung up on

• Asked for an email address to which an explanation would be sent, which never occurred of course
• Transferred to a supervisor, who also couldn’t give me any information
• Transferred to a supervisor, who proceeded to explain to me that “she shouldn’t be saying this” but she doesn’t know where her company buys all this consumer information from, but that she never ever fills in any forms on the Internet, and that if I want a mortgage I should just “go to the company I want” otherwise my information could be sold many times and the Do-Not-Call protections don’t necessarily apply
• After some discussion the person saying “fuck this” on the phone and hung up on

The great thing about the final point was that three days later another person from the same firm called me (Jeff) and I was a bit perplexed — I said that I’d already spoken with “Sandy” (I think it was actually Andy) and he of course maintained there was nobody by that name there. That he didn’t even think to say it might have been Andy I think was more about some kind of internal compensation issue most likely. But it might be the first time in my experience a company ended a conversation with “fuck” with a potential customer, and then had the chutzpah to call that customer back three days without a care in the world.

The varied approach that I’ve received from this and some other firms has been amazing — for most of them I shudder to think (since have very little process) what happens when there is a legal concern and an investigation, since in my case they could not handle a legitimate and basic inquiry around the source of their information. There are CRM packages out there for $20-$100 per seat per month that could certainly improve a lot of their coordination not to mention being able to actually give the customer more information about where the lead information came from, what the results of the first call were (”guy is trouble, don’t call back” might have been a valid note to take?) and to save time and make their business more efficient.

I’ll address that whole source of lead info side of things separately… but these days, if you have a product with a high value (several thousands dollars in the case of a brokered mortgage), have real onshore people speaking to customers [and of course with that, attendant legal risks], I just cannot understand why you wouldn’t spend a little bit of money to make sure you are tracking your behavior and can figure out who said what to whom, when. My point here is, that even if you are a fly-by-night organization, you can still use low-cost technology to improve your efficiency. The mortgage refinance business alas, is no longer shooting fish in a barrel, but most of these guys still have shotguns when sniper rifles are now pretty cheap.

Business failure due to macro shifts is a long, drawn-out process and in the interim, because the costs of wasting people’s time are not efficiently calculated, too many customers get to be pulled along through these firms’ slop.

Some analysis by Homethinking on the number of real estate agents per inhabitant for expensive places to live in the US. Clearly it is a market ripe for some change, hard to see how this many agents can survive in a slowing market (now as a follow up, Niki, lets see some sales data added up on this chart to see how much money these guys are realistically splitting). You’d also need to some additional analysis on the spread of the commissions which I’m quite sure would be a very nice pareto distribution.

Recently NexTag matched LowerMyBills in increasing the number of times it will “match” a mortgage lead from 4 times to 5 times. This means that when a consumer completes a mortgage application form on one of these sites, they will sell off the consumer’s information to up to 5 lenders (as opposed to 4).

Given where we are with big issues around lead quality for many buyers in this space, it seems primarily as a tactic aimed at pushing short-term revenue at the expense of lender conversion (perhaps with the idea that if the leads are generally of good quality, you can sell them 5x and it won’t matter much in the short-term — whereas the poor quality leads you shouldn’t even be trying to sell once?). I guess if I were optimistic I’d say this was very carefully modeled out by the various firms in the market before they made a decision to raise the match number but I cannot have that confidence and time will tell how the market moves around based on both internal conversion and external factors.

BTW the 4 figure was seemingly arbitrarily chosen at one point and the market coalesced around it. Jay Weintraub points this out in a piece he wrote on his blog that I found in bloglines and wanted to link to but then had disappeared from his blog. Strange, not sure why (is it perhaps because of the plug he gives to Low.com, a site operated b his employer? Not sure why that would be seen as a big deal by anyone… Jay’s articles are generally pretty fair and evenhanded if I can recall?). Were there other concerns about slighting potential partners. Anyhow, for the sake of the community and for interest’s sake, I figured I’d reproduce what I had found on Bloglines since there was no copyright information to be found on Jay’s site. I have cut and paste this completely as is from what I found on Bloglines at 3.30pm today.

Mortgage Lead Gen’s “Strive for 5”
By jayweintraub on Lead Generation

Update: John DeMayo informs me that although Jay removed the article from his blog it is available at http://www.dmconfidential.com/blogs/column/Trends/953/

Thus I removed the recapitulation of his article. Still not sure why he pulled it from his blog (?).

Thoughtshapers blog has this piece that covers Valueclick (which owns CJ) and also rumors about LowerMyBills’ affiliate program, which references the quality of affiliate-generated leads. Any situation where you have an entity getting paid for something that does not have an actual transaction attached to it (with attendant credit card number), that is online and could be done by someone offshore, and uses information *some of which* may be publicly available (e.g. in the phonebook), you have a riskky potential fraud situation. So it is with affiliate lead generation. (and mind you, LowerMyBills has one of the most sophisticated affiliate teams out there that works really really hard to clamp down on this stuff…)

There are certainly some high-quality affiliates out there actually generating quality traffic. But there are also some very shady practices that permeate this world — for example the “entrepreneurial” idea of having a person fill out a third-party form on your page in exchange for a $10 BestBuy giftcard (a variant of “co-registration”). Another favorite is using your own form to capture information, then having someone retype that information into multiple affiliate forms from different firms (lead-laundering is what I have named this one).

In short, there are many methods for doing this especially when you have many disparate, disconnected private marketplaces operating (specifically here in the mortgage lead generation) in competition with one another and not sharing any information. That is why a low-fee transparent online marketplace or exchange makes so much sense! These leads have value but they are being subsidized by higher-cost, better quality leads generated from organic media buys in many cases. Obviously more details on all of this to come from me on that in future posts…

Update: according to a very reliable industry source, LMB is definitely not turning off its affiliate program.

I’m trying out Kanoodle’s “DomainHop” service for some of my parked domains (very lucrative I’ll bet for many of the domain name registrars, to keep this stuff to themselves and pocket all the parking revenue) and when I looked at one of the links on one of my sites that was a directory of text links and clicked on the one that said “Buying/Selling Cars”, of course here are the links for cars (screenshot). Naturally, they’ve thrown in a few mortgage refinance text links in there! Unbelievable that this is the way ‘contextual’ advertising gets done… when in doubt, throw in a few extra mortgage ads!!!