• Archive for the ‘Uncategorized’ Category

  • Gainful Employment Rules Announced – Stocks Surge

    June 2nd, 2011
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    As Inside Higher Ed reports, “After 10 months, more than 100 meetings with for-profit colleges and other stakeholders and 90,000 written comments, the Education Department today formally unveiled its second attempt to craft a new system for determining whether vocational programs prepare their graduates for ‘”gainful employment.’” The process has been a long and rocky one, especially for those whose own version of gainful employment relies on servicing the for-profit education space.

    The largest of the for-profit schools are publicly traded companies. Looking at their stock prices over the past year has provided a glimpse into the rule making process. For those not following the rule making process, an entire sector has waited with baited breath as these rules determine the allocation and availability of federal funding. Given that federal funds make up the preponderance of revenue at for-profit education institutions. Any change to their availability could have severe impacts on a companies ability to generate revenue and thus the amount of leads they would purchase.

    Again as Inside Higher Ed reports, “the final rules focus on the amount of debt that students in for-profit and certificate programs take on, and on their prospects for paying it off. The final regulations offer colleges significantly more leeway, lowering the required debt-to-income ratios and giving institutions more chances to improve before they lose eligibility for federal financial aid.” Good news? Just take a look at the market today. As usual, there are those on both sides that aren’t happy with the rules, but given that new rules were happening, it’s nice to see ones that truly tried to balance the needs of both sides with the students still winning, i.e., receiving an education with greater accountability to their professional needs.

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  • Q&A with BrokersWeb Founder & CEO Matias de Tezanos

    May 19th, 2011
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    Showing that good companies can indeed reside in South Florida, BrokersWeb shared the news of their CEO and Founder, Mathias de Tezanos was named an Ernst &Young Entrepreneur Of The Year 2011 Florida Award Finalist. We decided to catch-up with Matias and hear the latest from a company that has certainly seen rapid growth in the past two years.

    LC: Congratulations on Being named Ernst & Young Entrepreneur Of The Year 2011 Florida Award Finalist. Sounds great. What exactly does that mean?

    MT: Thank you. It means that we have a fantastic team that built one of the fastest growing companies in online media.BrokersWeb is anything but your first start-up. Take us through what brought you to this point?Our last company was a display adnetwork serving every vertical. It was a good business however we realized that there were a handful of verticals generating most of our revenue. This new company was built with the vision of focusing in one big vertical knowing that if we executed correctly we could build a dominant presence. After researching, we concluded that insurance was one of the verticals with the biggest potential. We started with health insurance and expanded rapidly into other types of insurance like auto, life, medicare supplemental, renters and home. We continue to expand our reach and depth within insurance. In full honesty it’s been hard but so far we’ve been lucky to find the right team to build all the opportunities we identified.

    LC: Very impressive. How does the world of lead generation compare to the other industries you’ve served?

    MT: Its so much more sophisticated in every way: technology, media buying best practices, tracking capabilities, etc. Its so ROI driven that is the best example of why online media is a great business for all the participant parties (advertisers, media, consumers). I admire so many companies in the space, we’ve learned so much from all of them.

    LC: You seem to like challenges. What has the transition into other avenues of insurance, specifically auto insurance been like?

    MT: Like in any other industry, building a business is all about building relationships. We were enlightened by all our clients and publishers of the big opportunity that there was in other types of insurance aside from health insurance. They were familiar with our business ethics, quality traffic and higher publisher payouts in our health vertical, they asked us to go into those new types of insurance, and we delivered.

    LC: What are some of the challenges when it comes to scaling a business, especially in a new vertical?
    MT: Finding and hiring the right people, identifying and assigning them the right initiative and creating the right reporting structure that force everyone to review daily (or hourly if needed) if things are developing towards goals set. This sounds simple and common sense, however because of the day to day, the challenge is to maintain clarity in all of this.

    LC: If you could change anything about the online lead generation landscape, what would it be?

    MT:Transparency and how marketers are held responsible for the spend of their advertisers. We really like our business model because it forces us to deliver only good quality, otherwise our bids go down almost immediately. As we continue to focus in improving the quality of our network, we’ll continue to see a growing BrokersWeb.

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  • Daily Deal Summit – The First Ever Daily Deal Conference

    March 24th, 2011
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    The founders of LeadsCon have launched the first ever daily deal conference. Daily Deal Summit,  takes place in less than two weeks, on April 6th at the Grand Hyatt NYC. There’s a nice visual to get a feel for the event. To see all 220+ check out the full list of companies attending.

    Daily Deal Summit Logopalooza

    This show has been more than a year in the making. As followers of almost all things customer acquisition online, it was hard not to notice the rise of the group buying / group coupon businesses. The biggest question for me was how to classify them. Groupon, LivingSocial, etc. are lead generators. They are aggregators that sit in between merchants and users, helping each meet the other on a performance basis. As with lead generation, the actual “lead” (in this case a voucher) is rarely profitable for the merchant. It requires a percentage of voucher users to become long-term customers. Deal sites are direct response, customer acquisition businesses that have unlocked the economics of run of network spend with local targeting.

    Daily Deal sites are fascinating businesses. And, while lead generators, do they belong at LeadsCon? The answer we decided was no. It is the same reason why LeadsCon tends to shy away from an emphasis on business to business lead generation. The goal of LeadsCon is to create a targeted experience where attendees who don’t know each will feel as though those they meet could make for good partners. We try to avoid a high false-positive rate. That is why Daily Deal Summit is a separate event. The business model is the same but the buyers are different, the lead platforms are different, and the technology solutions are different. Traffic acquisition is almost identical, and that explains why more than a few from the sell side of LeadsCon are checking out Daily Deal Summit.

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  • One on One Marketing Nabs Investment

    October 22nd, 2010
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    The parent company to the ClassesAndCareers Portal, One on One Marketing, has accomplished what few thought possible in this environment – securing an sizable investment / liquidity event from the private equity world.

    Depending on one’s proximity to the investment world, it was no secret that many companies in the for-profit-education marketing space were looking for an exit. There were two very good reasons why. 1) Many of the companies had years of strong growth and attractive financials, and 2) they knew they faced an uncertain future ahead. If they didn’t exit now, there was a chance they might not exit for a quite some time.

    Those within the space had a head start on understanding the uncertainty; that is, they were aware of the potential for significant change almost a year before the broader public. That “neg reg” had begun would mean little to any who didn’t live for-profit education. Even many who relied on for-profit education marketing for tens of millions of revenue didn’t understand the process or significance. There was no guarantee that regulation would impact their business, but smart money said it would be a good time to realize years of gains and hard work. (See our regulation recap.)

    All of which makes the liquidity event by One on One that much more impressive. Were this to have occurred in March of this year, you could argue that the buyer didn’t know what was ahead. It would take all of 30 seconds of diligence to uncover some nice, big, bright warning flags.  Therefore, in this case, the buyer was obviously keenly aware of the regulatory environment and potential hurdles faced by One on One and other marketing services firms. Either they really blew it, which I doubt, or they liked what they saw and felt strongly enough in the fundamentals and management.

    I have not had the chance to meet Nick Greer, the CEO and founder of One on One Marketing, but I’ve heard that he’s built quite a business. Located in Utah, the company, not surprisingly, had initially relied on and specialized in call verified leads. That’s the practice of purchasing / generating generic or slightly less qualified data, sending it through a call center and then sending on to the schools only those leads who confirmed. The call verified business has surged overall, accounting I’d guess for at least 25% of all lead volume (if not more). What we heard is that One on One has managed to diversify, going from just call verified to a more well-rounded provider of leads. We didn’t have the chance to ask any of their lead buyers what they thought, but again, we suspect that the buyers did.

    What will this mean for the other companies who have since pulled their offerings? I hear that One on One received a very fair valuation (they didn’t need the money), so I have to think deal size was a factor; in other words, were they looking for a full exit (as I understand the others to have been), they probably couldn’t get the desired amount given the smaller amounts of debt being given to private equity firms for buyouts. Thus, the other players will probably have to wait until the uncertainty clears. This is just my understanding / guess. None of that takes away from the One on One Marketing transaction.

    Congratulations, Nick who I suspect is thanking Mike Lyon of Arbor Advisors for his and the team at Arbor’s ability to bring this deal to fruition.

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  • Personal Finance Site Mint.com Acquired for $170mm

    September 15th, 2009
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    mint
    For avid readers of TechCrunch, Mint.com is practically a household name, a “Silicon Valley darling” says The Alarm Clock. We have long been a fan and were fortunate enough to have them present at the inaugural LeadsCon Las Vegas 2008. News of their acquisition broke on the evening of September 13 with a rumor that financial software giant Intuit had come to an agreement. In less than 24 hours, Aaron Patzer, CEO of Mint.com had authored a guest post on TechCrunch confirming the speculation while giving both a great overview of their story and a definite nod to TechCrunch50, an event where startups pay to present for exposure to the tech community. It was Mint’s official coming out party two years ago.

    Mint.com epitomizes Web 2.0 in almost all ways – it has a slick interface, transformed once desktop software only functionality to the web, raised a bunch of money, and had a quick exit (three years from inception to sale). Best of all though, despite some of the sizzle that seems mandatory for any Silicon Valley startup of this era, they created a really great interface and exceptional user experience. And, they have managed what would have seemed an impossible feat years ago – getting hundreds of thousands of users to share their most personal information – credit card passwords, bank passwords, brokerage accounts, and more.  Also important to their success is that Mint didn’t actually create the underlying technology they use to suck in the data from one’s financial institutions. They did make a better mousetrap with that data.

    Mint Unique Visitor Chart

    (Screen shot of unique visitor growth over the past year. Click for larger image.)

    We see Mint as not just a Valley success story but a win for customer acquisition done the right way. Mint could have chosen many different revenue models, and with the amount of data they had access to, it would not have been hard for them to enter into some highly lucrative but potentially gray areas of monetization. Instead, they chose something quite unexpected – a pure pay for performance approach. Mint received payment when users converted on one of their recommended offers, e.g., by analyzing one’s savings account, they might suggest another with a higher APR. Mint deserves praise for avoiding the monetization temptation trap of suggesting offers that are better for them than the consumer. Were they a self-funded company, they might have.

    It’s also a win for performance-based online customer acquisition as to date, the vast majority of stories have come from very different types of business. As we wrote recently, in the online lead generation / customer acquisition world, three models exist, Arbitrage/Direct Marketing, Platform, or Brand Building (owning the customer one’s self). Here is what we said on trying to build a brand:

    The premise sounds easy enough – create a compelling consumer proposition such that users choose to visit your site. They either hear about you through PR / friends, or they find it through organic search results. While many companies own well ranked organic sites, Quinstreet chief among them, what differentiates that SEO approach from the brand approach is the investment in recall, in building a service that users don’t just use once but come back to time again. Among contenders, BillShrink has had the most high profile attention (hard to beat inclusion in a national T-Mobile commercial), but none can yet claim victory for the approach. If lead generation is in the second inning, then the brand approach is just getting drafted. Like the disclosure of earnings by Quinstreet, that companies like these exist is a boon to the long-term future of online customer acquisition, because it signals investor’s willingness to embrace the sector and a real focus on the user.

    Saying “no one can claim victory” has just become,  one can claim victory for the approach. In the Valley, $170mm might not be a big enough win for some investors, but it’s a great start for better business online.

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  • The First Post

    November 17th, 2008
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    Welcome to LeadConfidential.

    In a matter of just a few years, online lead generation went from a cottage industry to a multi-billion dollar per year segment of the advertising segment. Despite the industry’s success and the remarkable companies that make it one of the most dynamic sectors, online lead generation remains largely uncovered and unfortunately quite often misunderstood.

    Continuing in the tradition started with blogs like LeadCritic.com and BetterCloser.com, LeadConfidential looks to provide a repository for learning and awareness by highlighting the best practices, companies, and strategies for succeeding in the world of online customer acquistion.

    In fitting with the mission of being a reporsitory for information on lead generation and online customer acquisition, some of the first posts will be a collection of the most read articles from my personal blog.

    Thanks for joining us,

    Jay Weintraub
    LeadConfidential

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