By virtually all accounts, the start to the Online Lead Generation industry was LendingTree.com.  And we can all remember the TV commercials and slogan: “When banks compete, YOU win!”  The rest, as they say, is history.  Or is it?

LendingTree started lead gen as a VERY consumer focused company.  It built a brand.  The benefit was really for consumers.  They wanted to quickly compare price quotes for a commodity product.  The answer was the internet and LendingTree.  Oh, and by the way, the company had a business model! (unlike many companies at that time.)  It could help companies (product and service providers) harness consumer interest via the internet.  Whether search, display, type-in etc.  Anywhere a customer showed interest, this model could find that.  It was the ultimate bridge between consumer interest and companies… serving both and providing a rock-solid value proposition.

The brilliance of that idea has blossomed a breathtaking industry which now helps consumers find everything from a plumber to a an accounting degree to auto insurance.

But somewhere, between punching monkeys in pop ups and 5000 row excel spreadsheets, performance marketing and lead generation tipped the scales very much towards the companies it was serving (its customers) and away from being the bridge that connects consumers and businesses.

This is a problem.

Given my background, I’ve been speaking with several investors over the last few weeks regarding the QuinStreet IPO.  When they ask me what one of the biggest risks are to QuinStreet, I bring up one which really applies to the whole industry:Deterioration of the Consumer Experience.

To illustrate my point, I use a simple example from the EDU lead gen space (Our major focus vertical):

• Put yourself in the shoes of a 32 year old single mom who is working two jobs.  She knows she needs to upgrade her life via education.  She sits down in front of her computer and searches “Nursing Degree” or “Best Online Nursing Programs.”  Any example of the second search is here.
• Not ONE single search result actually gives her REAL information regarding her query (really, not a single one.)
• Every page leads her down a lead generation funnel so a school can call her
• With some kind of multi-leading, she may send her information out to 3-4 people

Given her original goal of finding information, conducting research and matching herself with the right schools was not accomplished, she either DOES not fill out the form or if she does she gets annoyed by a high number of calls.  In the case her information gets out (and some unscrupulous players may re-sell it), her phone rings off the hook for a number of weeks.  (Do the math, 3 schools each calling 4-5x=15 calls over a 2-5 day period!)  And even if she did fill out the form, she’s probably a low converting prospect due to the fact that A) she hasn’t found helpful information and B) she now is being annoyed.  The end result is really a lose, lose, lose situation.

This deterioration will lead the industry (no pun intended) to implode on itself for a number of reasons:

• Simply, if in 6 months, our example consumer wants to look at a degree again… she probably won’t go through the online channel!
• Google, the self declared protector of the consumer, will NOT tolerate having a search like the one mentioned above (i.e. their business relies on search results being relevant and if the above search contains no relevant information other than lead gen, they WILL find a way to stop it.)
• (this is more EDU focused) Government officials will be less inclined to allow for online marketing for Career schools
• Given their experience in one vertical, if the consumer catches wind they are heading down a lead gen funnel for another vertical (e.g., mortgage, insurance) they will abandon.

As players in the space have focused on the numbers and science in the space, they have forgotten the human.

To be fair, we definitely invest heavily on analytics, the numbers and the science of traffic acquisition and conversion.  And I’m sure we will continue to do so.

BUT, we view ourselves much more as a detective who realizes to catch a criminal, you have to ‘think like a criminal.’  So while today we focus on improving the math/science of traffic acquisition and optimization, this is simply the beginning of our race.  We view the current ‘lack of consumer focus’ as a fantastic market opportunity.  Long term, we believe the ‘end game’ is in getting the lead generation industry back to its roots.  Being a balanced bridge between consumers getting the information they need/want and businesses harnessing consumer demand.  We will continue to push in that direction as we build our business and believe, over the long term, it will make people happier, increase conversion rates for our leads, better represent our customers and ultimately push the industry to improve as a whole.

NOTE: How we are focusing on improving the consumer experience for the long haul will remain somewhat proprietary, for now.  But at the very least, I can tell you that we invest heavily in market research and understanding consumers.  We aim to build that into all of our lead gen efforts.