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The Online Lead Generation and an Understanding of the Pricing Models

The term online lead generation refers to the creation of the interest among the visitors towards the product or the services that is being offered. It has been seen that majority of the companies have realized the potential of the internet in reaching out to the people and that too from the varied regions as well as cultures and countries. This has emboldened them to gear up for the next big revolution that is sweeping the world of marketing-internet marketing. The generation of the leads could be for a variety of the purposes that could be as varied as the e-newsletter, list acquisition, in building out the reward programs, loyalty programs or any other member acquisition programs.

To get into the details of the lead generation we first need to know the real meaning of the term lead. Lead refers to the process of the sign-up for the advertiser offer that could include contact information or demographic information. In the market of the lead generation there are two types of leads that are the sales leads and the marketing leads.

  • The sales leads: The demographic criterion is the basis of the sales lead generation like income, age, HHI, FICO score etc. The sales leads are followed up by the sales force through the phone calls. Some of the industries that use the sales leads are the insurance, finance, and the mortgage leads
  • The Marketing leads: These kinds of leads are the brand specific leads and are offered only to a single advertiser.

In order to have a synchronized way of offering the advertisers the lead generations, three methods have been devised for the pricing models in the online advertising world. These three pricing models are:

  • CPM or the Cost per thousand: This pricing model charges the advertisers for the impressions that mean the number of times people view their ads. But there is a big problem with this pricing model. The problem is that in this pricing model the advertiser is charged even if the visitor to the site has not clicked on the advertisement.
  • CPC or the Cost per Click: This second method tries to overcome the shortcomings of the earlier method by charging the advertiser only when the visitor clicks on the ad. But the major leap that the cost per keyword has taken due to the increased competition in internet marketing has also led to an increase in the cost per click. This too has an adverse effect on the advertiser's campaign.
  • CPL or Cost per Lead: In order to overcome the pitfalls that were associated with the CPC and the CPM method, the method of CPL was developed. In this method the advertiser was charged only for the lead. Just like the CPC the price per lead could be bid up by demand. But even in this method the providers can con the advertisers. The provider can either manufacture leads or blend one source of lead with another.

Among all the three pricing models the CPL pricing method is one pf the most advertiser friendly method. In fact, in a recent survey it has been revealed that majority of the senior marketers have predicted that the 20% of the ad revenue would be in favor of the action based models and not the impression based models.

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