Our media strategies editor lays out the steps necessary for carrying out a successful online lead-generation program.

For a long time, advertising has been a game of hit-and-miss educated guessing, executed as mostly a one-sided conversation in which the marketer seeks to subtly -- or more often, not so subtly -- convince you that by engaging their product or service you will some how alter your relationship with the world around you for the better.

But in trying to find the right people to talk to, those most likely to have an interest in what you are saying, marketers often just flung spaghetti against a bunch of different walls and wondered if and where it was going to stick.

As the oft-quoted saying goes, "I know that half of my advertising works; I just don't know which half."

Advertisers now are looking for ever-increasing efficiencies from their media and marketing allocations. More and more, marketers want to see their media made accountable for the goals they set. After all, correlation is not causation, and though there is a lot that can be said about what might have been the cause for achieving -- or not achieving -- marketing goals through adverting, it isn't the same as knowing.

One of the most tried and true forms of demonstrating maximum accountability and yielding efficiencies in a marketing campaign is to run a lead-generation media campaign.

Lead-generation is the application of media or other means of communication in such a way that by the end of that interaction, a prospective consumer is formally entered into the consumption funnel. This can take the form of a registration for more information, the submission of an email address, the entering of a contest, or even an actual sale itself.

How do you plan for an effective, accountable media campaign for lead-generation?

The following are the first four of seven steps that lay out the basic course for planning and running an online lead generation media effort. (I'll get to steps five through seven next week.)

Step One: defining your core audience

Every product or service has a "core audience" to which it is marketed. This core audience consists of those who have been identified -- either by primary or syndicated research, or by previous experience with other similar products or services -- as being the most likely to be interested in the product or service being promoted.

The best way to do this is to conduct what I call Zero-based media planning. It assumes that the product being advertised has never been advertised before. It is a process that takes nothing for granted and proceeds from a point where nothing is known: a zero point.

This audience is typically defined by demographics (age, gender, income, geography), but with the kinds of advancements that have been made in media technology, behavioral and psychographic targeting has markedly improved, making audience definition more sublime and ostensibly precise. After all, if I'm selling, say, snowboards, I don't care so much that you are 16 or 36, so long as you are a snowboarder and I can identify you as such.

Something like MRI (Mediamark Research Inc.) and NetRatings' @plan can help the planner draw that first circle around an audience, setting the outer boundaries of the marketing environment with data that indicates category usage, product usage (both general and specific), demographics, activities participated in and some sense of how people think of themselves. From this, a general aggregate image of the consumers and their world starts to take form.

Step Two: defining your objectives

If you don't have a goal, it is going to be very difficult to know how to construct your plan or recognize your successes (or failures).

A well-constructed direct marketing campaign will be one that has as its motive a very clear objective. That objective must serve as the basis for the development of very clear metrics for success. These metrics must also be certain and prioritized. But it is the objective that has to first and foremost be set and remain insistent throughout the campaign.

There are two primary classifications of the aforementioned objective that need to be considered: efficiency or volumetric. The first is a "cost-per" satisfaction of a call to action ("click here," "buy now," et cetera); the second is a number of responses (e.g. visits) that need to be driven. If I can get a visitor, a.k.a. potential customer, at a $1 per, can I get enough of them to sustain me? How long would it take for me to get enough "leads" or customers to have a sustainable business success? The efficiency might be present, but the volume to make the yielded efficiency meaningful might not materialize.

And what if what I need are one million leads? Can they be had for the $1 I'm willing to pay, or will I have to up the ante to yield the necessary draw? Am I willing to pay more in order to get more?

Step Three: define the important data

This is really of a kind with the above (defining your objectives). Once you know what your objectives are, you can narrow in on which data are most likely to indicate whether those objectives are being met.

So much time can be lost chasing rabbits down rabbit holes that don't go anywhere if clear metrics are not set from the beginning. In a marketing environment where vast amounts of data are readily available, it is easy to get lost in a flood of superfluous data. Be sure to focus only on that data that can be turned into useable information. After all, it might be possible to track that men who watch SpikeTV eat more eggs for breakfast, but doing so isn't likely to yield any useful information if what you are selling are bassinets.

The most common and useful metrics are:

1. Rate of response
2. Leads generated
3. Costs per response
4. Cost per lead
5. Income per lead (when applicable)
6. All of the above applied to your creative assets

A note about #6: Testing your creative assets can be very useful and is essential to optimizing your campaign. (Here at iMedia Connection, we cover this topic extensively in our Creative Best Practices section.) Which email subject lines yield leads most efficiently? Which yield leads in greater volume? Which creative assets trigger more responses than others?

Step Four: setting your budgets

Ostensibly, with a lead-gen campaign setting budgets is easy. If you've got a volumetric goal (number of leads needed/wanted) and an efficiency goal (maximum allowable cost-per-lead), then the math to calculate budgets is simple: A (number of leads) times B (cost per lead) equals C (budget required to achieve the goal).

However, if you are committing to a lead-generation program for the first time, it is essential that you minimize your financial exposure by setting up low-level tests. First, allocate smaller budgets to multiple vendors. Then, limit the number of maximum leads to be generated by each until the time when you can read the data and learn which vendors are producing the highest quality leads most efficiently. From there, you can put down much larger budgets with those vendors that are performing best, comfortable in the fact that the leads being generated are the ones you want for the price you can accept.

Research the competition or, at least, the category. Determine what the costs-per-leads are that your product category averages and then use that as a starting point for setting your own cost per lead. 

The more data points a marketer requires for a lead to be considered qualified, the higher the cost-per-lead will be paid. If your co-registration program asks for 10 data points rather than five, the cost of that lead is going to go up because acquiring that lead takes more. But it could be that the addition of a few data points allows the marketer to more easily close a sale or yield greater value from a particular kind of customer.

By working with an experienced vendor, a marketer should know how many leads they can expect from their effort and set budgets accordingly.

I'll continue with this topic next week.

Jim Meskauskas is Media Strategies Editor for iMedia Connection.