We all see the negative impact of spending stupid in search. If we are careful, we build our programs to safeguard against big swings in efficiency or volume when a competitor gets out of whack. However, we should be more cognizant of those who are set up to monetize visits in multiple ways that are not in our interest.
What does this mean? If a site sells leads, they are motivated to accomplish two things:
1) get as many leads as possible and 2) sell those leads to as many retailers as possible. The better they do these, the more money they earn and the more money they can spend (ie, higher CPC).
Now, reputable lead gen is helpful. To be of value however, they need to be transparent and truthful to the consumer and they have to limit the number of retailers to whom they sell the leads. Good lead gen takes the long term view and strikes a balance between the quick $ and the quality of the lead. This provides buyers with help connecting to sellers and sellers with quality leads.
So, why am I writing about this now? I am at the JD Power Automotive Internet Roundtable. Gary Marcotte from Auto Nation pointed out specific issues that the auto industry faces (but this is not unique to them). In a large part, this is possible due to the effectiveness of search. The harm happens in several ways if the lead gen is not done well.
1) When these sites use deceptive practices, the consumer experience is obviously degraded, but your reputation is also harmed and there is a possibility that the industry reputation is hurt.
2) Your time ‘selling’ to these leads is wasted. You have an opportunity cost of not talking to other legitimate leads.
3) Your media costs are artificially inflated as these sites monetize trash at many levels, allowing them to spend more than the real market value of these ‘leads.’ This drives your costs up.
Unfortunately, retailers are not always sourcing the leads as carefully as they should, thus allowing these trash leads to blend in with the quality leads and continue to stealthily keep costs artificially high.
So, what can you do? Source leads. Not just to the lead gen company, but down to the actual initiating site. If your lead gen company can not provide the actual site, they should provide an ID in the link; that at least allows you to tell them to cut off a source due to poor quality. This allows you to cut the trash and limit your exposure to the bad sites (ultimately, converting everything to a sales-based metric would help the most).
You should also review the sites that come up on your search terms. By maintaining an eye on the environment, you can see if these sites are popping up (thus driving up your costs) and be sure you are not buying from them. Essentially, if they are advertising your brand, but monetizing the lead through someone else (ie, your competitor), then you need to question their commitment to your program.
One of the knee jerk reactions is to get rid of all affiliates or affiliate related search. This should not be part of your response scope. Manage by the quality that is delivered. Doing otherwise takes some contact paths away from the consumers. Since not all consumers take the same path, you want to be sure to keep all quality paths open.