Today, at almost every organization large and small who spends money online, you will find if not an entire team dedicated to search, then certainly at least one in-house expert focusing on it. For those working in the online space, that wasn’t necessarily the case three years ago, and it certainly wasn’t common five or more years ago. That such a role has developed and become both commonplace and essential is one of the many neat developments that have transpired as the internet has evolved. The same holds true for social media experts. More and more companies need them, but there isn’t a

In online lead generation space, a new such role is starting to exist – that of a lead quality expert. We haven’t quite hit the point yet where companies will think of having a Chief Lead Office, but it wouldn’t come as a surprise if one came to exist in the near future, especially at companies whose main source of revenue comes from either the generation or purchase of leads. Until then, we are starting to see the seeds of its predecessor, a role that for lack of a better title could go by Lead Quality Expert, Lead Quality Guru, or what I suspect will take shape, Lead Quality Manager.

David Rodnitzky wrote about the need for a Lead Revenue Officer in his Quick Hits piece on LeadsCon, saying, “‘Lead quality’ is just a metaphor for ‘revenue from leads.’” I think David’s correct, but perhaps his view is a little too advanced. The majority of people understand the need for quality, but they cannot separate out in practical sense the notion of quantity from revenue. When you talk about making more money, the knee-jerk reaction is still to look at that from a volume perspective. If viewed more holistically, though, making more money off leads would span not just quantity metrics but quality as well.

A talk of quality is nothing new, but that doesn’t mean organizations have truly aligned themselves towards acting on it. Actions of quality mean having treated lead quality just like any important function in the business with a combination of technology, expertise, and process implementation. That can’t happen until someone at the company lives and bread lead quality. To date, it is generally someone who takes on lead quality as an ancillary function to their current job, or  a developer handed Targus Info or eBureau technical documentation and expected to make it happen. You wouldn’t find that at a company who spends meaningfully (to them) on search has their search spend handled by someone whose job function encompasses more than search. And, so it should become the same with online lead generation.

There is too much money to be made, and there is already too much money being spent, for companies who aren’t currently aligned to maximize lead quality and thus revenue not to. In slightly easier to read English, if a company spends more than a full-time person’s salary buying or selling leads, it such consider having a full-time resource dedicated to maximizing quality. This is especially true for companies who spend hundreds of thousands of dollars and millions of dollars per year in online lead generation.

For those with an analytical mind and a technical enough bent, this is a great chance to craft a role that doesn’t have any prerequisites. You get to be a pioneer and becoming an expert in this will pave the way for countless opportunities that we can’t imagine today. Not to mention, you”ll help make the industry that much better.

Many companies have entered the for-profit education sector, especially those looking to generate leads. Few other online segments offer such attractive economics. The online lead generation space, certainly with respect to education, has few barriers to entry, requires a rather low amount of capital intensity, and success doesn’t require becoming class leading. It only requires one to perform incrementally better than the next provider. None of these are inherently wrong. They simply explain why so many who enter the online education lead generation segment focus on becoming a lead provider to the schools. As we see in the Quinstreet IPO filing, execute well, and a company can earn well north of a hundred million dollars annually servicing the sector. And, Quinstreet is not the only one. The race for the number one spot in education lead generation revenues is much closer than most think. There are three if not four in the $100mm club for online education lead generation. If you were going to enter the online education arena, wouldn’t you just operate a similar business? Not if you are Paul Freedman and his newest venture, Altius Education.

Altius, as we found out from Founder and CEO Paul Freedman is Latin for “higher”, which makes the company name a clever, yet clear, description of their focus – the world of higher education. For another clue about Altius’s model, it helps to know something about the focus of the lead investor, Maveron who along with Spark Capital put an eye-opening $8 million into Altius’ Series A round. Maveron, as many inside the world of investing know, was co-founded by Howard Schultz, the man who has built in Starbucks one of the most recognizable brands in the world. His passion for consumer brands drives Maveron’s investment strategy. If a company doesn’t touch consumers, they don’t invest, which explains why many of Maveron’s investments are, in many places, also household names – from the super swanky Pinkberry to education leader Capella University. Such a large captial raise, though, would not have been possible were it not for Paul, the entrepreneur behind Altius. Unlike the dot com boom in the 1990’s where a sock puppet and a dream could get funding, serious money today requires a track record. Paul’s began in college during which he built a site for for people to do homework without going to the library. His was a natural language engine during a time when when the majority of reference material consisted of Microsoft Encarta at best. By the time they built up scale in traffic, the monetization had dried up, at least from an ad revenue perspective, so they retooled the technology to go from b2c to b2b, licensing it to universities. It enabled schools to have an automated knowledge base that students could tap to answer their questions. Schools needed it because in almost one admissions cycle, user behavior went from phone calls or letters to emails and web traffic.

AcademicEngine, as it was known at the time, was sold to Hobsons in 2004, and Paul stayed on to lead its development through 2008. During his tenure, he noticed a pattern in the higher education space. More year students were choosing two year programs as a pathway to a four program, while traditional four year schools were both rejecting more students while increasing their appetite for junior transfers. There was and is a demand problem, but from a supply side, the two year programs, primarily community colleges, weren’t necessarily addressing areas for high economic demand post graduation or focusing on the matriculation process. More interesting than the problem was how Paul decided to solve it. He decided that he would focus on online education but innovate on the current supplier model. And, this where the need for a large amount of working capital comes into play. Altius partners with traditional non-profit who currently do not a strong online presence, or in any in most cases no online presence. Together, the non-profits and Altius form a for-profit company under a new brand with the school providing the content and professors, leaving Altius the rest, primarily the technical back-end and making sure the school has resources and processes in place to make sure leads become students. The schools get to focus on what they do best with Altius making sure that there are digital butts in seats.

Altius’ first partnership was with Tiffin University, and together they created Ivy Bridge College of Tiffin University. Already, the new school has matriculation arrangements with 24 traditional schools where those graduating from Ivy Bridge are ensured admission. Ivy Bridge and the two newest programs being publicly announced January 2010, are all mission thematic. They build programs that are as Paul says, “not in the belly of the curve,” and he believes that the Altius approach will lead to better content, more engaged students, and ideally, better jobs. If the early indicators can tell us anything, they most likely tell us that Altius stands a good chance. In their first year of operations, they have enrolled 500 students; these are people who filled out a lead form, then an application, met the requirements for admission, scheduled their courses, and then actually began taking classes. Their lead to enrollment rate is not much higher than the industry average, more importantly, their term on term student retention is five times higher. Naturally, the test will be to see how it scales. Regarldess, it’s an impressive venture. We hope they succeed because it helps the world of education and lead generation. We thank Paul for sharing, and you can meet Paul at LeadsCon Las Vegas 2010.

“It all started above a deli in Staten Island.” And so begins one of the lesser known and more  intriguing stories in the world of online lead generation, one that has resulted in not just one successful exit but potentially three. Junkies of online lead generation will know the name ClassesUSA, and they will know it not for some of its innovative work on display today but for owning display before anyone, even the schools themselves, understood that it could be done.  And, it all started above a deli in Staten Island.

The story which is today SeniorsForLiving.com began in 2000 when Jordon Keltz, who ran an internet consulting company ,became introduced to Luciano Rammairone, the founder of CollegBound. Today, they rank among the largest of online lead generation providers, easily in the top there, but in 2000, CollegeBound was an offline business, a series of publications for students and adults interested in higher education. Web guy meets education guy. They name their online venture ClassesUSA. The rest is history. Right? If only it were that easy. And, if it were that easy, the story wouldn’t be nearly as interesting.

The year 2000 was early for online education lead generation, but it wasn’t early for several of the larger for profit institutions. Apollo Group’s University of Phoenix for instance had just entered its third decade of existence, but unlike today, where liquidity / monetization for those entering the marketing of online education, there was no field guide for ClassesUSA aka “Classes.” Their first site in fact had none of the usual suspects that we find on today’s online education properties. Luciano knew he wanted to create an online business, hence partnering with Jordon and creating Classes. But, with neither knowing what exactly that entailed what do you do? In their case, the logical choice was creating a showcase of classes that could be taken online. And rather than compensation occurring on a per lead basis, they received payment on a per transaction level. These weren’t degree programs but vocational courses; think of it as an early version of EduFire.

Site built. Next was traffic, and this is where things start to click into place for amateur historians. In 2002, Jordon made a deal with MSN for placement. This wasn’t a straight banner deal but a more robust integration of their content and course listings. It was a cpc deal for MSN, where clicks on the courses would earn them money. It was still an arbitrage play for ClassesUSA, because they only received payment on a purchase. What they didn’t know at the time was that this deal and style of placement would become one of the best things that happened.  He certainly would have guessed it when they were losing money each month over month. But that would soon change, and it would change the entire focus of their business as well.  The placement attracted the attention of AIU who saw the Classes content as a natural fit for its certificates. That AIU wanted to pay on a lead basis was an initial stumbling block for a company that operated on an ecommerce model, but they went ahead and tried it.

Not long after, Jordon found himself hearing from Capella and the University of Phoenix. They too had seen the site, and now with AIU on there, they wanted placement as well. And, it was then that the business started to shift. Leads worked. They went from losing money to making money, and even better they had the premier entities coming to them as opposed to the other way around. The content deal started working too well in fact. Jordon negotiated a cap on the number of clicks they would pay out to MSN. After that cap, it was pure profit. Around the time that they began renegotiating the deal was the time that MSN introduced PerformancePlus, their display on a CPA program that was open to a select few big spenders, one of whom was Classes. Now, they started running individual school ads on display and on other placements throughout the site. And, guess what happened when they put Phoenix on the home page? Everyone wanted the same – from schools to other aggregators. The gatekeeper to that traffic for a period became Classes and on the path to exponential growth.

The next step became to own all of elearning on MSN, which they did, and then to apply that formula to other properties. Jordon proceeded to create a partnership with AOL, and in the next two years, he had crafted arrangements with almost all job and career sites. In 2005, Experian gave Classes an offer they couldn’t refuse, becoming part of Experian Interactive along with LowerMyBills and AffiliateFuel. Jordon moved Classes from its Staten Island headquarters that they shared with Luciano’s other business, CollegBound Network to the city, Manhattan. At about the same time, an old client from pre-Classes days was pitching a lead generation idea to him that Jordon invested in, and when his contract with Experian ended, he decided to take over the helm and apply his learnings to the senior housing lead generation space… which brings us to SeniorsForLiving.

The online lead generation space for seniors is a fascinating and tantalizing one. It has all the right makings for a successful vertical – a large audience (boomers and their parents), a high ticket price (senior housing is not cheap), a transactional component, and a decision that requires follow-up, i.e. you don’t buy it online. As any who has tried to get into a new vertical can tell you, it’s a grueling process. There is a huge sales undertaking as you work to get coverage for the leads and as you work on educating buyers who in the past haven’t used leads as part of their business. It is according to Jordon where education was about ten years ago. There are some national brands that buy leads, but the mid to long tail isn’t there. And, senior housing lead generation is more akin to ground schools lead gen as a physical presence is needed. If there is anyone who will have success beating down doors, though, it’s he. A key to success he tells me is making sure institutions understand performance based marketing is the way to go, and trying to institute some online dna into marketing teams that are often focused only offline. Sounds familiar to many, I’m sure.

Overall, Jordon is sticking to the formula he knows and believes in – user choice and exclusive leads. Their model focuses on a portal based approach where everything relies on the user making informed choices and understanding what happens next. That user doesn’t fill out a generic form but one for a specific institution. Not new to the game, SeniorsForLiving is focusing on quality of leads. As for traffic generation, they have made themselves very publisher friendly, and given what he did in the past, I wouldn’t be surprised if there weren’t some interesting partnerships in the works.

A name known to many but a company still unknown below the surface, Quinstreet announced plans to raise $250mm in an IPO and trade under the symbol QNST.  Having had their founder and CEO, Doug Valenti, on a panel at LeadsCon, it was a first opportunity for many of us to get a feel for their operation. There are volumes to be said on this, and a more detailed post is coming. If only we were part of the ex-Quinstreet list serv. Overall, a tremendous day for online lead generation, and we should all congratulate and thank Quinstreet, as a successful IPO will help list the entire industry and practice. Not everyone likes them, but for now, we should all root for them.

Here is what I wrote on my personal blog:

The day many of us have been waiting for (including Quinstreet) has arrived – the Quinstreet IPO. After years of speculation and some unanticipated market twists, Quinstreet announced its intention to go public, filing their S-1. For a company that has been incredibly secretive closed lipped, the S-1 is an amazing look under the hood of one of the most intriguing companies in the online lead generation space. It details their acquisition history, and while many of us knew about their acquisitive nature, none would have expected it to include more than 100 purchases with at least four eight figure deals. The Quinstreet today is no longer an education lead generation business. They are a roll-up and have been a source of liquidity for countless smaller publishers who sites earn revenue through lead generation. And, today they are a diversified play with some large client concentration but only 50% of the business being edu.

Much more to be said on the topic.

What’s another business known to run at extremely low margins? The travel industry, especially those offering airline tickets. Now, with most online travel agencies (Orbitz, Expedia, etc.) waiving fees on purchases, they make next to nothing. It’s why their affiliate programs pay out something like 4% of revenue on good day. The airlines themselves, aren’t exactly doing wonderfully themselves. So, it’s no wonder each has various ways of upselling users who convert. If you’ve booked on Expedia, in addition to being asked if you need a hotel or car, you will find yourself scrolling through countless activities available in your destination city. I can’t blame them. Those actually make them money unlike that flight you just bought. Frequent purchasers of tickets and ad junkies, will recall another upsell as well.

Here is the image of my recent booking for LeadsCon Las Vegas being held Tuesday, February 23 and Wednesday, February 24.

Notice something on the far right hand side? It’s a $50 cash back incentive.

For years, I can remember seeing a button like this one after I make a purchase on a variety of sites, especially airline sites. And, it’s this button that has come under fire, with a press release being issued by the U.S. Senate Committee on Commerce, Science, and Transportation. The release is below, but title tells enough, “Chairman Rockefeller Requests Information from Web Retailers in ‘Mystery Charges’ Investigation.” Read the list of companies who received a request for information, and those in our space will quickly connect the dots, or in this case,the button. The list reads like a who’s who of Adaptive Marketing and Webloyalty’s biggest customers. The key to their success and the publishers is something that the direct marketing industry refers to as Card on File. You’ve just made a purchase. They now have your credit card details. That makes an upsell easier and more rewarding because a purchase related upsell, generally a subscription service, is more lucrative than a data/form based one.

Here’s how it looks today. Click on the button, which has disclaimer language underneath, and you go here, to Reservation-Rewards. This site is not run by the airline/online travel agent. It is run by Webloyalty, a company that specializes in running subscription services, with their largest acquisition channel being online upsells. This is the same company and type that you would have seen offering these same subscription programs as an insert into your credit card bill. Sending an email telling someone to get $50 their next purchase and hoping they convert doesn’t work nearly as well as someone who just purchased.

Scroll to the bottom of the page, and here is what the conversion process looks like.

Regardless of the outcome, it’s a gray area. The companies doing card on file upsells in the past haven’t been angles. Since then, though, their practices are effective, but they haven’t been scandalous. The unfortunate truth is that I’m sure they do receive a higher than desired (by an outside governing body’s point of view) rate of people signing up who later didn’t recall doing so. Why would they? It’s an impulse purchase from a generic name. That’s the nature of the beast. That’s human nature, and there comes a point where you can only ask the companies to do so much and need to start demanding that the consumers take more responsibility. I’m sure I’d feel differently if the situation were reversed and I was paying $49.99/month+ and having difficulty canceling.

Copy of the release:

In classic Google style, the announcement came via one lone blogger and their Inside AdWords blog. I’m still convinced that posts for the Inside AdWords blog are re-written by a specially trained team in Japanese culture who know how to say one thing but mean something very different. Taken at face value, the words sound pleasant, almost complimentary, but translated into their real meaning, they would come across quite differently. The Comparison Ads announcement is no exception. The post, like almost any focusing on improvements to the algorithm speak about value to the user and a more qualified lead for the advertiser. What they are really saying is that the vast majority of those spending money today don’t do a good job. Not surprisingly, those within the online lead generation space have had a lot to say, and the voices represent some of Google’s longest, biggest spenders who can tell you that it was hard enough to spend effectively on Google without actually having to compete with them.  Both sides, not surprisingly, have many valid points.

(Photo credit: DoublePositive Blog)

Google Comparison Ads for mortgage is what every mortgage lead generator should have built but didn’t. (Read excellent non-partisan overview of the product from Nick Hedges of Leads360, who like LeadCritic, has hands-on mortgage industry experience.) And, it is because they didn’t build it that Google did. Saying that they should have built it doesn’t tell the whole side of the story. Should doesn’t mean could, and could is what separates Google from the aggregators whose results they displace. Dealing with Google is like dealing with the IRS. If they want something done, it gets done. Ignore the complexities involved with the actual quoting, and let’s focus on the buyers of the leads. Want lenders to buy anonymous leads, e.g., ones without the user’s real phone number? Want lead buyers to be ok with that phone number being tracked and the number deactivated after a while? Good luck being any other company who tries the same. It takes a Google to do it. Comparing others to Google or having them held to Google’s standards is itself a slight double standard.

Concerns about Google’s global positioning aside, we have an immense amount of respect for what was built, because it forces everyone to elevate their game and keep delivering a better product. This will cause some pain now but that Google speaks about leads is only a long-term benefit for lead generation. And not only do we respect the product, but we really respect the people who built it as they have lead generation and mortgage lead generation in their DNA.  First choice for many would be to not have Google enter, but since they did, at least the product was created by someone any in the industry would trust.

As Google (indirectly) said in their announcement post this is just the beginning. Here are our takeaways on what Comparison Ads means:

1. This is not about mortgages – a point we made when covering the Moretech / Lending Tree suit which blew the lid off the Google lead gen product, mortgages is the first vertical. But, it’s not even about verticals so much as Google’s stance on the way form-based lead generation is conducted today. There is a reason a landing page with a form can never get a 10 quality score. Forms themselves aren’t bad, but Google doesn’t like them to be the first and only goal. The user doesn’t click on an ad for “Compare Rates” because they want to see a simple thank you page and hear the phone ring. They want information, and if we can’t do it, Google will.
2. It still has to monetize – Google can’t lose money on their inventory just because they want to deliver a certain experience. If Google Comparison Ads do not help Google make more money, they will not continue to receive the premium placement. The same holds true for the lead buyers. They don’t hate the current ecosystem and so long as they spend money, don’t count out the current aggregation marketplaces.
3. It won’t work for everything – comparison ads work for things that can be compared; it requires standardized data and a more of a commodity product. Loans in general are a great fit as are credit cards and insurance. We weren’t the first to say or think that Bankrate got lucky by being taken private. Almost all verticals can use improvement, but the type of game changer created for mortgage isn’t as applicable to many service based industries.
4. Lead generation is not Google’s DNA – this platform works amazingly well for mortgages and financial products. But, not only is it no sure thing for many others, outside of a really small team, Google doesn’t get lead generation. The companies who do, and those who can add a marketing services + aggregation function, still have lots of growth ahead. Buyers aren’t going to stop wanting face to face meetings, hand holding, and golf outings. Comparison Ads is a game changer but not a category killer.
5. It’s just one spot – Google can’t capture every click and every conversion. They won’t stop taking money from others, and they aren’t marketers. That leaves many chances for others to continue to spend and capture those users who, as we all know, don’t actually want to do any work. They just want to fill out a form.

Years ago, I remember hearing about a company called RapLeaf and its desire to create the equivalent of the eBay Feedback  Score, a universal quantification of one’s reputation. Look at the score and you would have an instant understanding of their person. Unlike eBay, whose Feedback Score relates only to their activity within the auction site, RapLeaf wanted to create a score that transcended any particular site. That meant gathering data across sites. Unfortunately, their plans for creating the repository for reputation didn’t catch on, but showing their roots as successful entrepreneurs, Auren Hoffman and company, did what Max Levchin did with Slide. He transformed the business into something else that works.  Today, RapLeaf leverages their expertise in social media data aggregation to offer businesses a way to understand their customers better by having access to their social activity.

Calling today’s RapLeaf a startup version of Axciom or any number of data providers that if given some data can append it with additional is both accurate but selling short the uniqueness of RapLeaf’s data aggregation. I read a tweet recently that said, “2009: nearly 23% of Facebook users earn > $100,000/year; 16% for MySpace; 38% for LinkedIn.” The data came from a recent CNN Article titled, “Does your social class determine your online social network?” Regardless of one’s own personal feelings about the various social networks, as seen by this report, if you can know to which social networks a user belongs, you can glean some pretty insightful information that will help you make some potentially important business and marketing decisions. All a company needs in order to work with RapLeaf is a customer or potential customer’s email address. From there the process mirrors a more traditional data append service. As for what information, RapLeaf returns, here is a graphical representation instead of just a list.

So how are those in the online lead generation space using RapLeaf. To give you a hint of the potential power, a good friend of mine once joked that he would be more than happy if others didn’t learn about RapLeaf… and he meant it. An interesting example in my opinion comes from a not so obvious sector, those in payday loans. They use the RapLeaf data as a feedback loop. In other words, many in the space have found correlations between the quality of a lead, i.e., its likelihood for payback, and the social networks with which they belong. That correlation is probably not something we will see in a CNN article, though.  A more traditional example comes from outside the world of online lead generation where an agency or brand will desire to segment its users based on their social activity. This way, they can create custom segments and invite users to dialog with the company outside of just email. They can write those with Facebook accounts to become fans of their Facebook page, which will lead to both higher activity from that segmented blast and lower costs (by not sending a Facebook message to non-Facebook users).

Not unlike other data providers, RapLeaf charges on a query volume basis, and companies can access the data by sending over files or in real-time through their API. Many in the online lead generation space have extensive familiarity using third party data providers and will wonder whether another source can really add value. Not addressing the lead scoring products but only data append, TARGUSinfo and eBureau have the largest share of market in the lead gen space (or so I believe) with Service Objects and Melissa Data being names mentioned frequently as well. The first two have products that focus on the robustness of primarily a phone or postal data whereas RapLeaf focuses on the robustness of an email address, and what you can learn by understanding not just email robustness but social strength – age, gender, and number of friends. Social networks, though, change very fast. LinkedIn today might imply a professional on the whole, but in two years, who knows. So, like any data set, making the most of it means continuously using it and not just a one time check or broad assumptions. Higher cost, but quality in leads to quality out.

RapLeaf is based in San Francisco, California.

About RapLeaf by RapLeaf:

“Rapleaf is the leader in online people information search. Rapleaf’s services help top retailers, political organizations, airlines, hotels, banks, insurance companies, and other leading firms gain consumer insight, plan online media, and manage fraud risk in real-time. Today, Rapleaf has processed over 1 billion transactions and is one the largest people databases in the world with insight into 300+ million consumers. “

When thinking about the online advertising world, Charles Dicken’s immortal opening line from  A Tale of Two Cities frequently comes to mind. While most tend to remember “It was the best of times, it was the worst of times…” the next part of the same sentence applies equally well, namely “…it was the age of wisdom, it was the age of foolishness…” That at least is how I tend to think of the ever-changing performance marketing landscape. A better line might be, “The more things change, the more things stay the same.” Banner ads are flashier, online video a part of every day reality, and applications once possible only on the desktop are now available online, but human nature doesn’t change.

The New York Times, of all companies, was victim of classic human nature not too long ago. The newspaper’s online site was tricked into running ads for Vonage by a company that was not Vonage. Like any good scammer, they ran legitimate ads until no was looking, i.e. the weekend, at which time they switched from Vonage ads to phony virus-protection ads. According to reports, the new ads attempted to have users download supposed security software that ultimately bombarded users with ads until they paid for a piece of software that removed the newly installed virus. It’s an all too familiar scam that only highlights many of the vulnerabilities in the online ad ecosystem, especially in regards to display advertising. And if the NY Times is vulnerable, just imagine what lesser transgressions occur on a more regular basis. That is exactly what the New York based company PerformLine looks to make known so that advertisers and publishers don’t find themselves the unwitting victim in the often cat and mouse game of online monetization.

Founded almost two years ago by 12-year veteran of the online advertising space Alex Baydin, PerformLine has an ambitious goal-a goal that becomes more valuable with time, not less. In a world with only a handful of sites and ad placements, keeping track of what is running where is a relatively easy task. However, it is now virtually impossible to know where your ads run. And, despite assurances from networks about the quality of sites in their network, even they spend more time than they’d like battling rogue publishers putting their code on undesirable content. If PerformLine has its way, advertisers will rest assured and feel more in control. The PerformMatch platform focuses on providing transparency to the display process, giving advertisers a visible trail to follow and scoring sites based on their compliance to the terms set forth by the advertiser. PerformMatch is a campaign verification platform that looks to find and eliminate waste by acting as an independent third-party and automating the process so that it doesn’t become the unofficial job of the advertiser.

(Screenshot of PerformMatch interface. Click to enlarge.)

Bad behavior doesn’t confine itself to the display landscape, but this is the area with a lot of room for improvement. Display and email are the first two areas that PerformLine’s PerformMatch focuses on. As is the case with display, the company has proprietary technology allowing them to flag offending or potentially violating email creative so that advertisers can review it. Among other things, this allows advertisers to gain visibility into which subject lines and creative actually drive visitors to their pages. PerformMatch works for both advertisers and networks who want to make sure that traffic sources are compliant and not using troublesome ads or showing ads on compromising sites.

According to Alex Baydin, the company will begin with display and email, but the product road map has them creating similar optics into other major drivers of traffic, including search. In Baydin’s opinion, what is happening to the online marketing landscape today is no different than click fraud. It simply has another name-targeting fraud. Every time an advertiser’s message appears in a place or in context that it shouldn’t, that is fraud. Many companies have made click fraud known and offer ways to help advertisers, but far fewer, if any, are tackling the equally detrimental problem of targeting fraud. Ignorance can be bliss until your customers write you and tell you otherwise. Just ask the NY Times.

LeadsCon has a small number of followers, and not surprisingly, it generates almost all of its activity, around the time of the event.  Going through those tweets, though, a few started to stand out. Happy as I was to see the additional volume, they just didn’t make enough sense. Here is one such tweet:

It wasn’t until a few started appearing that I began to get curious.  Here’s a snapshot of them in context.

You most likely noticed two from different users with the exact same text but without the re-tweet. Again, for those not familiar with the event, it would seem a normal thing to say.  Except as the brand owner, I know it isn’t. That comment was four months too late, but it’s not the tardiness of the context that is the real problem. The link being promoted is. Having been in the performance marketing, online customer acquisition space for quite some time, I am used to seeing crafty affiliate tactics. This ranks up there. A click on the link takes you to a business, just not one relevant to the conference goer, unless we are talking about what a conference goer does on their personal time. Yes, you guessed it. The link goes to an adult dating site – XXXBlackbook.

Like a webmail account, signing up for a Twitter account is a frictionless process. That’ makes deciding the real users from the fake that much harder. A click on one of the profiles above doesn’t go to a blank page with no friends/followers and zero tweets. It goes to a page resembling an active user at first glance. And, while it might seem like a manual process, those doing this type of spam have it all automated, from the signups to the followers to the tweets. And, while you can rid the system of spam, you can’t rid it of human nature. Hard to say if this will become a chronic problem, something akin to Google developing Quality Score, or simply a passing fad. Having finally made Twitter a part of my business, and increasingly valuable part, I hope they can squash this sooner than later. With the upcoming $100 million investment and increasing omnipresence, something tells me they will.

Mint.com epitomizes Web 2.0 in almost all ways – it has a slick interface, transformed once desktop software only functionality to the web, raised a bunch of money, and had a quick exit (three years from inception to sale). Best of all though, despite some of the sizzle that seems mandatory for any Silicon Valley startup of this era, they created a really great interface and exceptional user experience. And, they have managed what would have seemed an impossible feat years ago – getting hundreds of thousands of users to share their most personal information – credit card passwords, bank passwords, brokerage accounts, and more.  Also important to their success is that Mint didn’t actually create the underlying technology they use to suck in the data from one’s financial institutions. They did make a better mousetrap with that data.

(Screen shot of unique visitor growth over the past year. Click for larger image.)

We see Mint as not just a Valley success story but a win for customer acquisition done the right way. Mint could have chosen many different revenue models, and with the amount of data they had access to, it would not have been hard for them to enter into some highly lucrative but potentially gray areas of monetization. Instead, they chose something quite unexpected – a pure pay for performance approach. Mint received payment when users converted on one of their recommended offers, e.g., by analyzing one’s savings account, they might suggest another with a higher APR. Mint deserves praise for avoiding the monetization temptation trap of suggesting offers that are better for them than the consumer. Were they a self-funded company, they might have.

It’s also a win for performance-based online customer acquisition as to date, the vast majority of stories have come from very different types of business. As we wrote recently, in the online lead generation / customer acquisition world, three models exist, Arbitrage/Direct Marketing, Platform, or Brand Building (owning the customer one’s self). Here is what we said on trying to build a brand:

The premise sounds easy enough – create a compelling consumer proposition such that users choose to visit your site. They either hear about you through PR / friends, or they find it through organic search results. While many companies own well ranked organic sites, Quinstreet chief among them, what differentiates that SEO approach from the brand approach is the investment in recall, in building a service that users don’t just use once but come back to time again. Among contenders, BillShrink has had the most high profile attention (hard to beat inclusion in a national T-Mobile commercial), but none can yet claim victory for the approach. If lead generation is in the second inning, then the brand approach is just getting drafted. Like the disclosure of earnings by Quinstreet, that companies like these exist is a boon to the long-term future of online customer acquisition, because it signals investor’s willingness to embrace the sector and a real focus on the user.

Saying “no one can claim victory” has just become,  one can claim victory for the approach. In the Valley, $170mm might not be a big enough win for some investors, but it’s a great start for better business online.