How Our Company, Vertical Insight Benefits From Very Recently Announced FCC Regulation
On November 22nd the FCC released guidance on their impending regulatory change to what is/is not permissible under TCPA (voice and text) communication regulations.
Ultimately the FCC is using a multi-pronged strategy to ultimately prohibit the lead generation industry from having the ability to have a consumer lead submission captured at one point, then be syndicated through sometimes complex, but also rudimentary lead generation networks for the purpose avoiding having to completely scrub that consumer from a lead generators’ database.
One of the reasons that the lead generation industry has fought to prevent this, and instead used business models and technology to exploit it – is the simple fact that often lead generators purposely try to recapture a consumer they’ve provided to one carrier partner and remarket the following year.
Consumers can use TCPA to request to be taken off a marketing list and not be contacted. The issue is that until this recent regulation, there’s been no means to make it logistically possible.
The New Regulation:
First, any entity that is using voice or text communication is required to honor an opt out within 24 hours.
Second, leads can only be sold or “leveraged” on a 1 to 1 basis. This means if a lead generation company is soliciting consumers for Medicare Advantage Plans – they can do so on behalf of – or to make a connection between the consumer to – a single entity.
This means that a single lead submission is matched with one party.
This is a complete paradigm shift for the entire marketing industry, as lead generation companies simply can no longer “spin up” demand by engaging with consumers via misleading texts, incentives and information – or 3rd party ad tracking tags simply as a means to get an “in market” consumer into a billable or transferable call.
Are Costs For SEM Marketing Going To Increase?
In the short term, there’s likely to be an increase in overall cost because of the high conversion rates associated with paid search. That said, likely immediately increases the demand for our marketing services. That benefit aside, the reality is that the current market is already reflective of the ceiling price for SEM driven media. Often there’s fluctuation that drives up or down costs at a macro level – much of this as a result of traditional lead generation. This regulatory change may prove to make the market significantly more stable moving forward.
The Vertical Insight benefit comes directly from having such a significant network of properties that are keyword matches for some of the most searched and important terms.
One example is “Puppy Insurance” and the keyword match property, PuppyInsurance.com. That term gets about 20% of the search volume of “Pet insurance” but in context of conversion rate and profitability from a loss ratio basis – having a consistent 10% to 20% advantage over any competitor for “puppy insurance” is more desirable than having that same advantage for “pet insurance”.
Many companies apart from Allstate’s Health Network have established that consumers are more likely to click on a Google ad for a business if there is a legitimate business with a name that matches the term they just searched for. Often advertisers with significant high value keyword match domains, such as PuppyInsurance.com – can bid for position #2 in Google auctions, but have a CTR that’s equal to position #1. This is approximately a 10% to 20% savings on a per-click basis.
This strategy provides the ability to create not only a statistical advantage for a primary keyword – but to help establish dominance for that keyword in the marketplace. In effect for the example provided above, “PuppyInsurance.com is the category leader for Puppy insurance”.
Another advantage that Vertical Insight’s Pet Business benefits from is increased LTV’s and decreased loss ratios driven from reduced churn rates. Allstate’s Health Network found better performance than the entire health insurance marketing industry in part by segmenting under 65 health products into independent channels. Traditional lead generation often tried to blur the lines between major med and short term health insurance plans. Health Network did the opposite and created sites like ShortTermHealthInsurance.com to educate the consumer and ensure that they were making an informed decision.
Our network in pet health is taking an identical approach. One example are properties that segment and educate consumers on the difference between pet health insurance plans, and pet wellness plans. Again having a baseline 10% to 20% keyword based advantage for these critical terms, is incredibly advantageous.
In a far more regulated marketing environment, one wherein consumers are more inclined to return to explore their options – it is even more impactful.
Traditional Lead Co-Operative Network.
In this example, the single consumer lead submission can result in 20 to 24 calls in 24 hours. Months later that consumer may also be presented content in social media that’s “once engaged with, indicates the consumer is back in market and seeking a phone call”.
The purpose is to not only extract maximum value from a single lead within the first 24 hours of submission, but to ensure that the lead originator is going to be legally able to pursue this consumer through engagement via other brands, partnerships or through lead exchange arrangements.
Typically the Lead Originator (Single Lead Submit – Blue Box) has ownership or control over three of the LBC (Black Box) entities. That is an entity that calls the lead once, then passes the lead to three other parties LDD (Lead Dial Distribution).
Each LDD calls the consumer once in 24 hours. After 24 to 48 hours the LDD then sells the lead to another 4 to 5 buyers. Buyers can be via lead exchange or a reciprocal partnership in which the lead is shared and 3rd party (cookie tracking) remarketing services are shared.
This model once scaled across a larger number of major lead generation companies has proven to be an effective manner for the lead generation industry to artificially create approximately 70% of purchased leads.
There are only so many real consumers in-market, in paid search, at any given time. This is a paradigm shift for marketing and the companies with the ability to more efficiently market their superior consumer experience, WIN!
- MeowMeowMeow is 100% owned by Vertical Insight Corp.