Lead generation is a very simple concept, and one that’s been around offline for decades. It generally involves acquiring and selling contact information for a qualified “lead,” or individual who is likely to be interested in a certain product or service. For example, the post office sells information about people who have recently moved–or who at least submitted a mail forwarding request–to cable companies and hardware stores.
Lead generation has become a massive online industry in recent years, with countless sites devoted to capturing information of well qualified leads that can be sold to companies looking to acquire new customers. There are a number of different lead gen verticals. But there are of course some corners of this market that are larger and more liquid than others. (Read our Q&A with lead generation veteran Rich McIver for more on what makes an attractive lead gen vertical.)
Attractive lead generation niches generally have many of the following characteristics:
Below are some of the largest lead generation niches out there, along with examples of each:
Insurance is probably the largest lead generation vertical. The products (e.g., an auto insurance policy) are largely commoditized, there are a number of interested buyers of leads, and there is minimal qualification that is required since just about everyone online is able to purchase insurance.
Moreover, the insurance industry has been booming lately and the major players now have significant amounts of cash with which to acquire new business. (Pay attention the next time you watch TV; it seems as if every other ad is for an insurance company.)
Here’s a screenshot of Insurance.com, one of thousands of insurance lead generation sites out there. It’s a pretty straightforward lead gen operation, with a basic sign-up widget and a clear call-to-action. The site also contains a blog and a database of useful information to make it more visible to search engine traffic:
A robust lead gen market has developed for more local service providers as well. This category is quite broad, but generally includes any professional who would be hired to do work within a home. While many people will ask friends for recommendations, there is a lot of search traffic for home services as well.
Remodeling and construction jobs are often quite profitable, meaning the companies looking for work can afford to pay a bit for a qualified lead. Moreover, because these companies tend to be small, local businesses they are somewhat limited in their marketing and advertising promotions. They’re not going to be buying national air time or running an ad in a national newspaper; these campaigns wouldn’t generate positive ROI. But spending a few bucks for a qualified lead is well within their budget, and more likely to result in a profitable job as well.
Many of these sites also offer some sort of rating or review system as well in order to provide value to visitors and add some depth to their site. Here’s an example from HomeAdvisor.com that comes up in a search for “flooring repair Chicago”:
The right leads can be worth a significant amount of money to lawyers; they can translate into hefty legal bills or even a percentage of any awarded damages in some cases.
Legal lead gen spans a number of niches, from divorce and family law to medical malpractice. Below is an example of a DUI lead gen site, DUIRespond.com. It’s a classic lead gen “gauntlet,” asking gradually for detailed information about a specific case that allows the site to match inputs with a relevant lawyer. After this page, you’ll be prompted for answers to additional questions, including:
Obviously, the answers to all of these will help to determine the attractiveness of the lead. Someone with no previous convictions, no desire to fight the suspension, and no ability to pay for a lawyer isn’t all that interesting to a lawyer. Conversely, someone charged with DUI who wants to fight a suspension, does not yet have a lawyer, and can pay for a lawyer with their personal savings could be a dream client for a DUI lawyer.
As the online education industry has grown in recent years, so too has the lead gen business in this vertical. Online universities compete for potential new students, and there are a number of institutions who are willing to pay for contact information of individuals who have expressed an interest in pursuing an education online.
Because this product is primarily delivered online, it should be no surprise that many potential students search for information about potential programs online. And although online colleges and universities are generally much cheaper than traditional institutions, a new enrolled student is still very valuable. With hundreds of online colleges now operating, there is no shortage of buyers for qualified leads.
Below is an example of a site that comes up in a search for “online nursing programs”.
The credit card lead gen vertical is in many ways similar to the insurance vertical. The products, while numerous, are basically commoditized in that many companies offer similar cards. Moreover, the qualification hurdles are pretty low; a significant portion of the online demographic can qualify for some form of credit card. Unlike insurance, there is minimal upfront cost to the consumer, which means that every lead could relatively easily become a client. And a new client is relatively valuable to the credit card company, especially if they are able to gradually work them up to more expensive products.
Credit card lead gen sites may be more appropriately classified under the affiliate marketing vertical, in the sense that they link out to third party sites where the application is actually completed. If a referred visitor completes an application and is approved, then the referring domain earns its lead gen fee. But we still consider this to be a lead gen vertical, in part because from the perspective of the credit card company a completed application is still just a “lead” that is yet to generate any revenue for them. (Here’s a good read on the differences between affiliate marketing and lead generation.)
Credit card lead gen sites generally add value by ranking or reviewing the countless card options out there. For example, CompareCards.com features cards identified as the “top bad credit credit card” and “top reward credit card.” Here’s that lead gen site in action:
The mortgage and real estate vertical is another extremely active lead gen opportunity. While many will rely on personal recommendations to find a realtor or mortgage broker, there is also a significant amount of search traffic around this term as well. Moreover, because each new client in this vertical is worth a considerable amount of money to a realtor or mortgage broker, they can afford to pay quite a bit for a well-qualified lead.
Mortgage and real estate lead gen also exhibits characteristics of affiliate marketing, in the sense that these sites will generally link out to third party partners for a form to be completed. Again, we consider this to be lead gen because the action in the Cost-per-Action (CPA) pricing model doesn’t generate any revenue for the purchaser of that lead. In fact, a relatively small percentage of visitors who complete a mortgage approval form ever end up acquiring a mortgage through the company that buys that lead. Those that do convert, however, can generate meaningful revenue.
Zillow, which is best known as a resource for finding information about real estate, generates revenue through lead generation for mortgage companies. Here’s an example of the interface that appears after entering in some basic information (including ZIP code and credit score):
The value add of matchmaking (or, dating) lead generation sites is generally some rating or review database, which should give interested visitors an idea of which sites will give them the best chance of success (though the actual usefulness of this review information is questionable in many cases). Here’s an example:
This vertical may seem a bit out of place on this list, but it’s a fast-growing lead gen segment and a good fit for a lead generation site.
Converted leads are very valuable, as many care centers cost tens of thousands of dollars a year. And referrals from friends and families aren’t quite as easy to come by, which leads to decent search volumes for these types of services. And there are generally a number of interested lead buyers in any given area of the country, all offering generally similar services. Finally, because care providers and nursing homes cater to a very specific segment of the population, broad-based ad campaigns (such as TV and radio commercials) are unlikely to generate positive ROI. Those marketing dollars are better spent on qualified leads resulting from people actively searching out care options.
Below is an example of a site that comes up on a search for “assisted living Chicago”. Submitting this mini-widget prompts you for more information, including email and phone number. From there, the lead is presumably off to nursing homes in the area, and a phone call and email to the interested family member aren’t far behind.
For more ideas on large and liquid lead generation niches, the websites of the largest lead aggregators can be useful resources. QuinStreet lists a handful of additional verticals (albeit somewhat broad ones) in which it is active.
Lead generation as a monetization technique for online properties has countless appearances; there are hundreds of different verticals in which qualified leads can be monetized. The most popular niches are those in which buyers tend to be numerous and deep-pocketed (or in which the cost of the product or service is subsidized by a third, as is the case in legal and education) and in which the value of a converted lead is high.
It’s worth noting that just because a niche is popular doesn’t necessarily make it appealing to someone looking to get into the game. There’s intense competition in all of the niches highlighted above, including from some well-funded and established players. While these verticals are extremely liquid, success is far from guaranteed.
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