Lead the way

By Published on .

Can business media companies adapt to the lead-generation monetization model and move the price of leads high enough to fuel profitable growth?

A customer arrives beaming ear to ear. A lead from a recent webinar hosted by your online media brand converted into a six-figure deal. All it cost for the lead—if you count the total cost of the webinar, which produced 300 leads altogether—was $15,000. “Maybe I'll do another one of those webinars,” the client says, “but one of your competitors can do the same thing for $12,000.”

The client believes the customer was simply ready to buy—and ready to buy the client's product. The lead could have come from anywhere and could have been cheaper in the client's opinion.

Just like the paid-content debate, in which media companies are trying to educate the public about the cost of producing the content they enjoy reading for free online, the issue with lead generation has nothing to do with whether b-to-b media companies are willing or able to produce leads. It's all about having a monetization model—whether it's cost-per-lead, CPM or package pricing—that covers all the costs a media company must bear to create an environment that brings buyers and sellers together—and produce a profit on top of that.

The IT media market has been forced to accommodate a lead-generation monetization model for many years. “Companies like ours can and do make money off cost-per-lead [CPL] programs,” said Tony Uphoff, CEO of United Business Media's TechWeb. “As we have unlocked the model, lead generation has become quite profitable. But like a lot of media folks, I'm frustrated that we have to use our media talent trying to articulate our value as opposed to just producing the value.”

Alex Ford is CEO of Praetorian Group, an online media company with properties that include, and Even though his company has been online-only since its founding in 1999, Ford voiced the same frustrations as many executives at print-heritage companies when it comes to extracting value through the lead-generation model. “We've stayed away from cost-per-lead and cost-per-click programs,” he said. “A lot of the companies we work with say they're only measuring online advertising by the number of sales leads they get. If we're working off that metric, how do we value everything else we're doing? Our biggest challenge is helping our customers understand all that has to go on before the lead is generated.”

Facing the same educational challenge and similar pressure for CPL pricing, Gill Torren, VP-sales and associate publisher of Haymarket's SC Magazine, is offering CPL programs but at a very high price, competitively speaking. “Our salespeople are getting very good at hammering back with all the reasons clients should assign higher value to our leads,” such as the credibility of the 20-year-old brand, its highly regarded content and its tight focus on the IT security segment. Nonetheless, it's a struggle to convey this value message to someone whose primary responsibility is to get the highest number of leads for the lowest price, he said.

Even as the economy improves, media executives don't expect the pressure for leads to abate. So they are continuing to explore ways to give their customers what they want, which is leads, and to make more money doing it.

“What we all need to do, to state the obvious, is rethink our business model,” said Seth Nichols, CEO of Longitude Media, which licensed the Cadalyst brand from Questex Media a year ago. Earlier this year, Cadalyst started offering programs that incorporate branding and awareness elements along with lead generation; the entire program is rolled up and priced on a CPL basis (see sidebar, this page).

FierceMarkets is a b-to-b media company founded 10 years ago with a model of delivering editorial content via e-mail newsletters because the vehicle was so effective in generating leads. The company, which Questex acquired in 2008, has expanded its portfolio with Web sites, webinars and live events in five verticals, including IT, where “it's leads, leads, leads more than ever,” said Sean Griffey, president of FierceMarkets. While some vertical markets are not under as much pressure as IT to produce leads, that time will come soon, requiring fundamental changes in the way media companies do business, he said.

“In traditional print advertising, if an ad didn't produce results, the publisher could say it was because the advertiser didn't have good creative or an effective call to action,” Griffey said. “With the lead-generation model, a [media company] promises to deliver leads, so you have to be the one that monitors it and makes the changes that are necessary to get the results. This takes different skills and technologies.”

“Media people need to be aware that there is an art and a science of lead generation,” said Michael Friedenberg, CEO of IDG Enterprise. “Most media companies are very good on the art side, producing rich content that brings an audience to a site and drives registrants for lead generation. “Now you're seeing IDG Enterprise and other media companies exploring the science side, the practices of search engine marketing, social media optimization, search engine optimization and analytics. You're starting to see companies get a lot more sophisticated in these areas to increase their lead-gen business.” M

Most Popular
In this article: