December 10, 2021
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Lead Gen Is Great, But Also Addictive and Misses Major Opportunity

Sometimes I think about the heyday of magazine publishing when brands would throw money at a publisher for a piece of paper with the hope that it might drive business. No one actually knew if it drove business, but hey, you could at least see it.

With the internet, everything became trackable. If you click an ad, I know it. If you sign up for a webinar, I know it. I also know which ad drove you to said page. I know so much more than I would have if I had purchased a magazine advertisement.

Lead generation is the de facto advertisement of choice for b2b media companies because advertisers demand it. The reason? Many b2b companies don’t have the budget to do big, splashy brand campaigns, so they need to directly correlate marketing with sales. The cycle is tighter even if it is also longer. I’ll return to why I think this is wrong later in the piece.

In a nutshell, clients pay b2b publishers to drive targeted readers. If you are a shipping company, you might target the shipping departments at retail companies. And so, you’d partner with a b2b company to get the message out. It sounds pretty great, right?

The common strategy is straightforward. The advertiser either provides a piece of content or the publisher creates one. They then agree upon a set number of leads and the publisher promotes the piece of content any way it can to hit that number of leads. The advertiser is happy because they receive contact information from prospective buyers and the publisher is rewarded. So long as the publisher drives qualified leads, the advertiser will come back.

But it can get pretty nefarious pretty quickly.

I was having drinks the other day with an executive who has worked with dozens of b2b companies in his career. And one thing he said to me really stood out. “Lead gen can be a great model. But it’s like a drug. A very addictive drug. Once you start, it’s very hard to stop.”

The problem with much of b2b lead gen today is that it’s lazy and devalues the audience. One type of lead gen is the dedicated email blast. Essentially, the publisher creates an email on behalf of a partner and blasts the email list. In some cases, the partner provides the actual HTML. It takes about ten minutes to set it up. Whether the audience cares or not, the publisher blasts their inbox with another campaign and then cashes a check. There’s no inherent value.

The major problem with this approach is that it’s a strategy built on churn. When someone subscribes to an email list like a newsletter, they are expecting to receive exactly that: a newsletter. But then they start receiving dedicated email blasts—either provided by the advertiser or created in-house by the publisher. This isn’t likely what they signed up for, so they churn.

And when it comes time to unsubscribe, it’s not always as easy as it might seem. I’ve heard of one publisher that had a couple of hundred commercial email lists; one for each of its advertisers. When it sends a dedicated campaign on behalf of an advertiser and a user unsubscribes, the user is only removed from an email list correlated to that advertiser. In my mind, this doesn’t follow CAN-SPAM requirements, but I’ve heard otherwise as well.

I digress…

Even for publishers that don’t want to spam their audience, it’s still sometimes necessary. If your lead gen program guarantees 100 leads and you’ve only provided 30 through on-site or in-newsletter promotion, sometimes you have to send that dedicated email blast. You may have the best of intentions, but that first send is the gateway drug.

If it’s so bad for the audience, why do publishers do it? I think there are a couple of reasons. First, many publishers actually don’t value their relationship with the reader. There is no appreciation for the soft cost of an unsubscribe, so they just spam away. Second, many legacy b2b media companies are still struggling to overcome the loss of magazine margins, so their sellers will do whatever they can to make up for it.

Despite all of this, I don’t actually believe lead gen is an inherently bad strategy. On the contrary, as part of a well-balanced marketing diet, it’s actually a great strategy. But there are a few things I would do differently to help balance the needs between readers and sponsors.

First, understand the value of a subscriber. I’ve written about it in the past, but understanding the LTV of a subscriber is the precursor to offering any sort of lead gen program. Why? If you’re going to do any sort of dedicated email blasts, you’re going to lose subscribers. The number you lose should be factored into your costs so you can understand a true margin. Losing a subscriber that you’d monetize in another way is still lost revenue.

Second, don’t just take any piece of content from the advertiser. Instead, create something unique through an internal content studio. Publishers are great at creating content (I hope), so we should work with brands to create a great article, white paper, webinar, video, or other pieces of content locked behind the “lead wall.” If your audience likes your style, create content in a similar format so it resonates with the reader.

Third, do away with the advertiser-provided HTML email blast. It’s such easy money, but once you start, it takes legitimate conviction to stop. Instead, understand exactly who the client wants to target, and try to create a very segmented audience. It’s not going to be perfect by any stretch. But at least you’re creating something in your voice, style, and design rather than just taking the client’s HTML.

Fourth, don’t provide a ton of leads. When I was at CoinDesk, we did a webinar for a partner where we drove 1,700 leads. We were young and dumb, so we gave all 1,700 leads. That company never advertised with us again. Why should they? We gave them so many possible contacts to work with. Instead, only give a small guaranteed amount for the initial contract, and then if the partner wants to buy more, they should pay for more.

And finally, seriously push back on advertising campaigns that are 100% lead gen. This is something I am passionate about and I think b2b media operators owe it to their marketers to help them understand. The problem with lead gen is that it hopes to serendipitously catch a buyer when they want to buy a product. What happens if someone isn’t yet in the market for what you have to offer? They would be considered a lead, but wouldn’t be a success for the marketer.

At CoinDesk, I signed a contract with Salesforce Marketing Cloud. Almost immediately, I knew it was too much for my small team. But I signed a three-year deal. During those three years, I saw Sailthru ads, continued learning about the company, and built an opinion about the brand. So when my contract with Salesforce was coming to a close, I immediately knew who I wanted to reach out to.

Brand matters. A lot. What’s one reason that so many people choose Salesforce in the first place? Because people know that it can do everything. And that’s because of the brand it built. According to this interview with Colin Fleming at Salesforce by the B2B Institute at Linkedin on the importance of b2b brand building:

Well, even when you have a compelling customer insight, and we did, you still need to connect that to the bottom line. We found a great study on B2B buying behavior showing that two-thirds of the time, when a business decision-maker purchases software, they already have a brand in mind. And 94% of the time, the buyer ends up sticking with that brand. So if you’re not part of the original consideration set, there’s no way you’re getting bought. And that’s how we tied this marketing problem around unaided awareness to a downstream business problem. That made everyone sit up and take notice. 

The issue is that brand building is expensive. And it takes time. For many b2b marketers, it is hard to relate a brand advertisement with the bottom line. So, when budgets are small, the marketer goes with what can be tracked.

But the brand still matters. And so, I believe any advertising campaign should be a blend of brand and lead generation. Even if a reader isn’t an active buyer today, becoming the go-to brand in their mind is most likely the difference between them choosing a product or not. At the same time, lead gen is a great way to target those that are serendipitously in the market for a specific product.

As publishers, we need to start taking our audience more seriously. We need to value the relationship. Spamming the hell out of them is not a good way to build a lasting relationship. At the same time, we need to start working with our marketers to understand that brand really matters. If we only push lead gen programs, we’re not helping the brands build lasting impact with readers. It may be hard, but publishers need to be consultative. This is a good place to do it. And for the love of everything, please stop sending blanket advertiser-provided HTML email blasts. They suck.

Thanks for reading today’s newsletter. If you have thoughts, please hit reply or join the AMO slack channel. I hope you have a great weekend and see you next week.

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