What is Lead Generation?

This term is commonly used to refer to the general process of acquiring the contact information of potential clients.

Many companies will engage in lead generation practices in order to identify potential new customers for their products and services. However, there is also a popular Web monetization strategy that involves collecting contact information (i.e., generating leads) and then selling them to other companies to whom these leads would be valuable.

Companies generally have multiple Web-based sources of potential new customers, including:

1. Organic search traffic
2. Paid search engine marketing
3. Paid display advertising
4. Purchased leads

An insurance company, for example, may use all of these techniques to find new customers. In many verticals, purchasing relevant and qualified leads from sites who are experts in capturing them will result in the highest ROI.

It’s worth noting that many leads generated online relate to products and services that are not Web-based. In fact, many of the most profitable lead generation niches revolve around traditional businesses such as car insurance, legal services, and senior care (there are some notable exceptions, such as online dating). Though these are more tangible products sold through traditional channels, many interested shoppers now research the different options online.

Monetizing via Lead Generation

This monetization strategy generally involves:

1. Publishing a site in a targeted, high value niche;
2. Implementing a lead capture widget to collect contact information from your visitors;
3. Selling any leads collected either to a lead aggregator or a company interested in selling to that individual.

Lead generation can occur in a number of verticals, through there are a handful of niches where this practice is particularly common (the Guide to Lead Generation in the Resources section below has more information on the most popular lead gen areas).

Lead Gen In Action

Sites that monetize primarily through lead generation strategies are often subtle in their attempts to capture contact information, primarily because many visitors aren’t entirely comfortable with their information being bought and sold.

The “capture” part of the lead gen process is often disguised as a simple form to receive more information or unlock additional functionality:

Lead Generation Models

Many of the suggestions for building a successful lead generation business focus on maximizing the capture of information from visitors once they are on a site. However, the first step in this process obviously involves building a site that will attract visitors interested in a specific topic. Many lead generation sites rely on paid search engine marketing to drive traffic, attempting to devise a system that sees them generating more revenue from each visitor than they pay to acquire.

Many successful lead generation sites are built around databases of information that attract consumers interested in a particular product or service. For example, LoopNet.com is built around a database of real estate available for rental or purchase:

The above screenshot captures only the database side of this site. When users zero in on a specific property, they are exposed to a lead generation widget that will pass along a message and contact information (such as email address and phone number) to a specific broker or landlord.