A few weeks ago, Performance Marketing Insider posted a piece that asked, "Is Lead Generation a Zero Sum Game?". The piece was small, but thought-provoking as we are a smaller lead generation company ourselves. That said, as a small lead generation company, we are still seeing growth where others are not able to do so, so I thought I'd take a moment to address each of his bulleted points.
: David mentions that converted leads tend to be the goal of lead buyers. Depending on your field, this may not be the entire case. In some fields, that idea only reaches the tip of the iceberg. (link to Education Leads page) Education lead generation, for example, doesn't just want students that will convert into students—The desire is for students who will graduate. That is another complex problem for dumped in the lap of lead generation specialists.
Economies of Scale: While we don't blend "high quality" and "low quality" leads at FII, we can see the appeal and have certainly heard of the complex systems in place at some of the bigger players in each field to do just that—certain economies of scale are still available even to smaller players in each field. It is simply a matter of your growth is able to pattern and create revenue models. There is more to this but giving away too much would be giving away competitive advantages that help our company grow.
Diminished Arbitrage Opportunities: This is one that actually pleases us. Certainly Google cutting off the long tail with auto-completion was a hit to lead generators, but we sincerely believe that it is providing a better experience to our customers. However, this certainly made competition more fierce and cut into our profit margin, but we are seeing better quality users coming through after these changes rather compared to before. That premium that we pay is a fair price to pay for lead quality.
Buyer Knowledge: It can be a double-edged sword. On one hand, increasingly knowledgeable lead buyers means that when you provide good leads to clients, your business grows. For certain companies in the field that have a long standing reputation in selling less scrupulous leads, your capacity greatly diminishes because the buyers know what to look for.
Regulation: CAN-SPAM? If CAN-SPAM is a serious hindrance to your business, then good riddance. The space is cleaner, more honest, and less vulnerable to increased regulation without your ilk present.
In the end, David makes a point that lead generation is no longer in the domain of "mom and pop" companies working out of garages and I wholeheartedly disagree. The best and brightest companies in our field those that are setting the bar for all of us to push to the next level are just that: a few people working out of a garage. I hope that is a trend that doesn't change anytime soon.