By Sean Fenlon on September 1, 2014
TRANSCRIPTION:
Michael Ferree: Alright welcome back to LeadsCon 2014. We’re here with Sean Fenlon from DoublePositive. I’m really, really happy to see you here at LeadsCon East. We’re gonna have a minute to just chit chat and talk about things that’s what’s going on in the industry. But first, tell me a little bit about what’s going about DoublePositive, what services you’re offering, give us a little background that people don’t know about DoublePositive or what you guys have going on?
Sean Fenlon: Sure! DoublePositive is a performance-based online marketing company. And we like to think of ourselves as the real powerhouse in the Lead Gen space. We were founded in 2004. We consider ourselves the inventor of the hot transfer, which is an important part of the ecosystem today. We started off in the mortgage industry in 2004 which is an extension of my previous business which was for TheLoanPage.com, which was a little mortgage Lead Gen business it was like a mini LendingTree or LowerMyBills and it was sold in 2003 and it was really one of the first Lead Gen exits ever. And I started DoublePositive with the vision of evolving the performance pricing model of Lead Gen not just from per-impression or per-click or per-lead but up to a cost per transfer model and that did well for us… Until the mortgage industry blew up in 2007 and 2008 and we did with a lot of the folks in this space had to do which is to pivot into some other growing Lead Gen verticals like insurance and education. We were doing very good in education when that rise was occurring and lent us to become and yielded the agency of record contract with the second biggest lead buyer on the planet which really diversified our capabilities quite a bit as their agency – a full-service potential agency. And we took those capabilities and we parlayed them into some new business offerings like a mobile pay per call product and a performance-based display product coming out of the programmatic and real-time-biddable (RTB) display inventory. And even some conventional Lead Gen. If there is a way to describe the current state of DoublePositive the hash tag would be #diversification. So, now multi-vertical we’re a lot of different verticals, we have a lot of different pricing models, we have a lot of different channels that we work within, and we have a lot of different customers. I think that is one of the keys to success in this eco system which is diversification.
Michael Ferree: Yeah, absolutely! And you touched on the inventor of the hot transfer and calls and I’ll grant you that too, because you guys were first in this space. And now we see, we look back ten years have gone by and calls are continuing to rise in popularity, right? Especially, with the advent of mobile and display click to call all these sorts of things. How are you guys reacting and evolving to that? And you talked about mobile a little bit – what you know having that service offering? What do you see? There’s the ramp and the calls – how is that affecting business, what’s going on there?
Sean Fenlon: You know it’s interesting, ten years ago the premise was the same, calls were still were more valuable than a data lead ten years ago. So, why in the world was the data lead part of the ecosystem so much bigger than the live call part of the ecosystem? My theory is filters. Really, Lead Gen is a performance-based delivery of advertising. And when you buy conventional advertising you can’t say “I want this type of person in this location, with this type of buying criteria.” But you could with the data lead – a consumer will be filling out of form, which allowed the lead buyer to say “I want this or not this one, I want a price this one like this…” But in a call environment, the call is more valuable unto itself but there’s no filtering capabilities. So, I think that’s why the data lead kind of got the early foothold. Then a lot of the offers started to commoditize and a lot of the lead buyers and advertisers started to open up the apertures as far as what consumers they could sell too. So, all of a sudden that filtering took a little bit of a back seat to the fact that live contact was the most important attribute of Lead Generation or online marketing. You can’t sell anything to anybody you don’t talk to. So, there’s no contact that’s a sunk cost.
So, I think the mobile channel and the fact that a mobile device is a live communication device, and, well, computers really aren’t – even a laptop – I mean you could cobble something together with Skype – but the idea of establishing a live communication with somebody really had to wait for the handset. So then, the ad unit that was the “click to call” ad unit facilitated those calls.
Now, the industry has developed ways of filtering through IVR’s, you know Interactive Voice Response systems were you press 1 if you have this or press 2 if you have that. So, they’ve been able to get some of the best of both worlds. Some of the filtering that they used to have from the data Lead Gen world with that live call delivery model that is more valuable to an advertiser at the end of the day.
Michael Ferree: You know, we’re talking about a call which you can create a number of ways. One, you can create by calling a data lead, right? And then making a hot transfer.
Sean Fenlon: That’s right!
Michael Ferree: Or you can also create a call by a mobile click or click to call that goes directly to that advertiser.
Sean Fenlon: That’s right!
Michael Ferree: My question is intent. Earlier we always talk about intent and we talked about on different interviews about the form and when you look at people on the form time on the form it relates to the intent that they have. I’m curious to know. Do you think there’s a lack of intent in click to call leads? Now, obviously we want to get people on the call but you know does that reflect the lack of intent also lower cost lead?
Sean Fenlon: Yeah. So, I have a formula. I don’t know if anybody’s gonna buy it. But the formula is I=AT squared. Intent = Attention x Time squared. So, time is sort of friction. When a consumer fights through time, paying attention to something to get to the end, that indicates a high level of intent.
Michael Ferree: Yeah!
Sean Fenlon: So, even before calls were part of the eco system lending tree had a form that sometimes took people fifteen, twenty minutes to complete. Well, yielded the highest octane leads on the planet as a result to that. Now the breakage was higher so you have to kind of work that out. So a call in which it’s an errant click on an ad on Flappy Bird. Yeah, there’s a very low intent there, so the fact that it is a live call really doesn’t mean much.
However, if you had somebody doing a mobile search and you present them with an ad and the ad response said, click here if you want a free quick call now and they click on that. Then they go through an IVR and they have to answer some or more questions. Then they have to be transferred over to a live person who answers and they stay on that phone for sixty seconds to create a billable event. I think we can probably assume there’s a high level of intent with that call. So, really it’s not about the delivery model it’s about the path the consumer took and the consumer experience. And to me the more time is spent by the consumer paying attention to the offer, the higher the intent level the higher the interest level and the higher the conversion rate.
Michael Ferree: How do you guys deal with it? ‘Coz there’s a clear shift between working data leads that will come in and you outbound call versus receiving a call.
Sean Fenlon: That’s right!
Michael Ferree: And clearly there’s a trend especially whether you would do like strictly a mobile for inbound calls.
Sean Fenlon: Right!
Michael Ferree: So, are companies probably making that shift or are they able to? With what you are saying are they able to make that shift or it’s so ingrained in outbound call versus the inbound call. Is it hard for them to be successful? Or is it or am I making this whole up?
Sean Fenlon: No, you’re not making it up at all. You’re touching on some key points. We’ve got a philosophy to deal with this complexity of this question which is work backwards from demand. So, the demand is for lead buyers, the advertisers. And one thing I’ve learned over the past ten years is they all have unique ways about what they want to buy, how they want to buy it, how they want to price, how they want it delivered. And for a long time with DoublePositive we were doing what I call missionary selling which was stop buying data leads they’re bad, buy hot transfers they’re good.
But I realize billions of dollars was already set around buying data leads. So, we slowly started with evolving and adapt to the idea of look let’s work backwards from demand. How do they want to price, how they want it delivered and let’s work backwards. So there are some lead buyers that want a hot transfer because it is the combination of that filtered data lead that they become accustomed to for so long, this primarily a mortgage and education the two big verticals with the live call as the delivery model and the performance based pricing on a per transfer level. Great we’ve got that for you.
We’ve got other folks that say, look I’ve got an internal transfer team I just need the data to fill it. So, great! Those guys just want to buy data. We’ve got some other advertisers and lead buyers in verticals like home services and automotive that say look, I’m not into that added layer of cost that a call centre screening might bring. If you’ve got a genuinely interested consumer that’s on the phone that wants an auto insurance quote, I’ll buy that just as is. So, I have stopped to trying to tell the lead buyers and marketers and advertisers of the world how to buy.
Michael Ferree: Just give them the options.
Sean Fenlon: Exactly! And say you tell me how you want to buy and I will work backwards from that to deliver it to you at the right price.
Michael Ferree: Yeah. So, how long did that take you to learn that one?
Sean Fenlon: It’s better part of the decade. Yup! I’ve got some battle scars to show. :-)
Michael Ferree: Yeah right. So, let’s talk about that. A decade that’s a hundred years…
Sean Fenlon: …In Internet time, yeah.
Michael Ferree: Yeah. So you’ve seen evolution. You’ve seen war or lack of evolution or has it been an evolution? Or let’s say let’s look at the lead the ecosystem and the buyers and sellers? I mean, have you seen the improvement and how are we defining improvement? What do you see you know what have you seen over the last ten years then what do you see moving forward?
Sean Fenlon: You know it’s interesting we raised several rounds of venture capital and I basically used one slide that used to have up on your blog. The evolution slide of the CPM pricing to the CPC pricing to this cost per lead then to the hot transfer. One of the things is, it’s continuing to evolve with some big businesses that have emerged in this past decade – businesses that have not just stopped at the transfers as a delivery model, rather they’ve actually making the sale for the customer.
Michael Ferree: Yeah.
Sean Fenlon: So businesses like Red Ventures and Tranzact and ClearLink, they’re doing full-funnel customer acquisitions for their advertiser clients. They’re doing a great job, and they make a lot of money doing so. Personally, I’ve never had the courage to enter into that last level of the funnel which involves a managing a consumer-facing salesforce, and not just a “qualifying” call center.
Michael Ferree: Yeah.
Sean Fenlon: So, there’s been that further evolution but also there’s been a reverse or de-evolution or… I don’t know what the right word is for that. So with that, a lot of clicks are being bought now. So in the world of Lead Gen that has blossomed into this $3 Billion market, I think you and I would both agree the vast majority of the value that’s coming out of Search.
Michael Ferree: Yeah.
Sean Fenlon: So, a lead buyer or lead seller buying a click from Google turning it into a Lead and then selling it, because Search is the highest-intent channel – that’s where the consumers doing the searching.
Michael Ferree: Right.
Sean Fenlon: So along that same period of time a lot of the biggest Lead Buyers developed internal teams to buy the clicks themselves on branded keywords. So, they developed all this plumbing, landing, page optimization, and right pricing so that they could buy clicks – and they felt a heck of a lot more like a marketer when they were buying clicks on branded terms than when they are buying leads from third parties in a marketplace like this. So they are very mature in click-buying. So what we are seeing some of the biggest lead sellers go backwards and start to sell clicks now.
Michael Ferree: Okay. Yup, yup.
Sean Fenlon: So we’ve seen this from Education Dynamics, we’ve seen this with Quinstreet, with Vantage Media… all have added click-based products now.
Michael Ferree: Do you think that’s a result of lead quality and the animal that is delivering a data lead and a quality in generating that traffic versus saying almost like you.
Sean Fenlon: Sure!
Michael Ferree: You made the decision to say, I’m not gonna handle this sales process.
Sean Fenlon: Right.
Michael Ferree: We know the call portion, and marketers Lead Gen is always going what we know marketing, we know paid search, we know this and yeah we are going to do this while we’re here, we’re going to send you this lead but then I call up well these leads are horrible this and the other. But now, they say listen let’s just do what our specialty is clicks or whatever it is.
Sean Fenlon: Yeah!
Michael Ferree: And sort of like you said, de-evolutionize sort of themselves a little bit and said okay this is where we’re going back to.
Sean Fenlon: But it gets back to what everybody wants, they would all love to do all the marketing themselves.
Michael Ferree: Yeah, sure.
Sean Fenlon: The thing is the economics just would never favorable enough – wanting to do all the marketing, which is why they turned to third parties. When you turn to third parties you are having your brand disintermediated.
Michael Ferree: Yeah!
Sean Fenlon: So, Bank of America isn’t the brand on the consumer offer, LendingTree is, okay? So Bank of America would love to be the offer all the way through even if the lead doesn’t ultimately convert. So the thing about buying a click is, it goes down the advertiser’s or the brand’s path. So it’s a branded lead, so irrespective of outcome, it is going to be a higher quality. Now, that’s gonna be a higher cost too, but the customer acquisition cost should still ultimately play out to be about same… But it’s branded! So even the ones that don’t convert they feel pretty good about – they were in complete control of their brand and the consumer experience from end to end. So clicks are making a comeback. I’m very impressed because I’ve never heard of a reverse evolution or de-evolution before.
Michael Ferree: Yeah! So, okay. So we’ve got that and we look forward in the next few years and I said few years because typically I’d say what’s the future of five years but being our industry evolves pretty quickly for the most part, technology-wise. What do you see, you know, how do you see things moving forward? Do you see this continued evolution of clicks? Do you see mobile expanding more that’s a lot obvious? What other things you see from a buyer stand point or even a marketers or sales stand point from an evolution till my next couple of years?
Sean Fenlon: More software and more technology. The greatest challenge I think that this whole ecosystem faces in every vertical is that at the end of the day it’s a funnel that brings a human together with a human. Mike, you’ve managed sales forces before, you’ve been part of sales organizations, so you know – that’s wildly unpredictable. So you can try right-price leads and have them all go through smart-decisioning, but at the end of the day when you bring a human together with a human that’s wildly unpredictable.
So I would look for technologies that reduce the dependence on a live human sales person. Now, there are some industries where you’re just not gonna get away from it. The mortgage industry is way too complex to have an automated end to end transaction. Some would probably say the same about education. However, there are probably areas which software and technology can replace a lot of the functions and let the consumer take control of what they’re trying to accomplish so that a human sales person’s involvement is really limited in scope. They’re not as much of administrator just more of a facilitator and so there’s some technologies even here at the show if you’ve taken a look at AVA.AI. Now there’s artificial intelligence to be the front end of lead management so that the sales person role is a little bit more limited and that way the unpredictable part of that whole value chain is more mitigated.
Michael Ferree: Yeah, So you. Okay last, last thing. You’ve been to what every LeadsCon?
Sean Fenlon: All of ‘em.
Michael Ferree: Every single one of them.
Sean Fenlon: Every single one.
Michael Ferree: How has it changed, you know, little plug for LeadsCon here. I want to know what your opinion is. How’s it change and the help in the industry and your take on it? You know you’ve been to every single one for Christ sake. Come on.
Sean Fenlon: This is the easiest plug ever because a lot of people walking around the floor here have probably heard me say the exact same words. I attribute a lot of the success – most of the success – and the growth of LeadGen, to the growth of LeadsCon. So you know, as the world’s first Hot Transfer provider back in the day, we found ourselves largely in between the lead buyers and the lead sellers. But we didn’t know who the buyers were and who the sellers were, nor what the value proposition was. We would do Google search just to try and find people on both sides of this equation.
And then in 2007 Jay had just come off a TARGUSinfo Summit and sent me a note and saying, “Hey I’m thinking about that but instead of a customer summit around one company I’m thinking about a broader ecosystem type tradeshow.” And I said, “Sign me up and I would be the first sponsor.” And since then, what we saw in 2007 was largely dominated by the mortgage industry still but by 2008 and 2009 that shifted and education had really taken the seed. And I see these last few years as really been a multi-vertical play and now with the birth of B2B LeadsCon, a whole new dimension to chase down but look the idea of having this nebulous cloud of performance marketing of lead gen galvanized twice a year so that people on stage and networking is fantastic, and obviously the meeting rooms are always you know quite busy and full of buzz.
All of a sudden people can map out this landscape and then they can have a strategy on how to bring their specific business in the market and so the ability of a company to start very quickly and blossom very quickly. I think of Lead Cloud as a company that without LeadsCon I just can’t imagine how it could have gotten so much traction so quickly. So it’s a fantastic service for the whole ecosystem, and thank goodness for Jay for starting it. Thank you for your team for continuing it.
Michael Ferree: And I appreciate you spending the time with us today Sean. It’s good to always touch base with you and get your thoughts on the vertical and the industry as a whole. So I appreciate it. Thank you.
