Art & Commerce: Call It What You Will

Do you know which online ad vehicle grew by 74 percent in 2006, making it the fastest-growing interactive ad tool for the second year in a row (and by nearly 30 percentage points), according to the Interactive Advertising Bureau? I’ll give you a hint: It’s not search, it’s not video and it’s not consumer generated.

It’s online lead generation. And if you haven’t heard of it, you’re not alone.

At a conference recently, I struck up a conversation with a beverage marketer who told me her brand didn’t do online lead generation. However, what she described—driving consumers to the brand site to sign up for a newsletter—was, in fact, online lead generation, just by a different name.

Based on this conversation and others, I suspect much of the confusion stems from marketers using different terminology to describe the same thing: using an online contact form to collect a consumer’s information and permission to market to him or her in the future.

In fact, what you call it probably has a great deal to do with your industry. “Lead generation” has traditionally been the domain of direct marketers and sales-oriented industries like automotive and real estate. As the lines between direct and brand marketing have blurred in recent years, the practice has expanded to traditional brand marketers in a wide range of industries.

Retailers, for instance, are collecting names and contact info to fuel their e-mail communications strategies, which include promoting sales and targeting grand-opening announcements by ZIP code. CPG marketers use lead generation for request-based product sampling and brand loyalty initiatives such as delivering product usage suggestions and recipes via a newsletter. Pharmaceutical companies are utilizing online contact forms to identify ailment sufferers and drive them into their doctor’s office for a prescription consultation and sample.

The term “lead generation” is uncommon in these industries and probably doesn’t make much sense to them. So as the practice spread across the marketplace, a proliferation of virtually synonymous descriptors followed for both the process and the ensuing marketing efforts: “customer acquisition,” “database acquisition” and “building your house list” are all used to drive customer engagement, one-to-one marketing and CRM.

In any case, what it’s called is less important than the reasons why online lead generation has soared in popularity, especially among brand marketers.

The advent of the Internet has offered marketers of all kinds a highly efficient cost-per-lead model that eliminates the expense of printing and postage and shrinks turnaround time for campaign evaluation to just days. For brands, however, the true attraction is unprecedented interactivity. For the first time, marketers have two-way communication with consumers.

Magnifying this crucial development are equally important changes in the marketing landscape. The severe fragmentation of media has split consumers’ time and deluged them with marketing messages. In addition, new thinking in customer relationship management dictates catering to the people in your database based on their individual tastes, rather than en masse.

All told, these changes have contributed to the prevailing desire among brand marketers to establish a true dialogue with consumers, which allows them to bypass all other distractions, customize the message and forge a stronger relationship through one-on-one interaction.

The first step, of course, is gaining the consumer’s consent to start the dialogue, which brings us back to online lead generation.

Acquiring a consumer’s explicit permission to receive marketing communications is the very purpose for which online lead generation was designed and the reason it has prospered to such a great degree in recent years. No other vehicle is better suited for efficiently building a database of interested consumers because it mandates an informed, proactive opt-in by each individual who fills out an advertiser’s contact form.

So whether they recognize the name or not, more and more brand marketers are indeed recognizing the value of online lead generation. And with all signs pointing to the category continuing its record growth in 2007, if you’re not currently one of them, chances are by next year you will be.