Buyerzone – Doing Lead Gen Right

As much as I’d like to think I know about lead generation and lead generation companies, each day it seems I learn of a lead generation company and/or vertical that I didn’t know before. Reading alarm:clock a few days ago, I had the experience of both learning about new verticals and learning about a new company happen all at once. Potentially even more disturbing for a self-described lead gen guy is that this company is anything but new. Founded in 1992, this company is almost older than some of the people working in the Internet space. The company, Buyerzone, made news because of its acquisition by Reed Business Information.

The acquirer, Reed Business, might not sound familiar to many, but it’s a company that has revenues exceeding $2 billion dollars with operations across five continents. Its Business Information group, the one responsible for acquiring Buyerzone, is, according to the their site, North America’s largest business-to-business information provider, with more than 80 market-leading publications and 55 Websites, along with a range of services that includes tradeshows. Those in the Internet advertising space might not read Spec Check or Construction Digest, but certainly those residing in Los Angeles have seen a copy of their entertainment publication Variety.

If, like me, you have not heard of either company before the sale, there is a good reason. Both companies operate business to business. The company was founded in 1992, but looking through the press releases, the company received funding in 1999. Looking at archive.org, the site started out more as an information site on office related topics – a cross between a directory and guide. Between 1998 and 2000, the company refined its offering and went from a resource to lead generation. Instead of simply providing free content on all their categories and sending users elsewhere to shop, they started offering users free quotes and sending them to forms.

Impressively, Buyerzone hit profitability in 2002, something that we expect for lead generation to consumers but not necessarily for business purchasing which was surely impacted quite heavily from the events in September 2001. In 2004, new investor Bessemer Venture Partners and existing investor Commonwealth Capital Ventures bought an ownership stake of the company via an acquisition of outstanding shares. Buyerzone had a bevy of other investors, including BancBoston Ventures, Flagship Ventures and Women’s Growth Capital Fund.

Besides their early history and early adoption of lead generation, the sheer number of verticals in which it operates make Buyerzone intriguing. In the consumer facing lead generation market – verticals such as mortgage, online education, auto finance, and pay day loans, almost no company has a sales channel in all of them. This is the John Demayo wide and deep concept. Those marketing to consumers often do one vertical very well (going deep) but cannot translate that success across other verticals. Or, companies can have moderate success across a number of verticals (going wide) but do not become a top player in any of those verticals.

In the consumer lead generation space, that shown most across the net, we see many more companies that focus on one, to a handful, of verticals and fewer like Reply.com and MatchMaven.com that offer a sizable amount. Compare either of the latter to Buyerzone, though, and prepare to be overwhelmed. Not only does Buyerzone offer lead generation for such areas as ATM Machines and Forklifts, they have at least one buyer and custom fields for each. It’s no wonder the Reed purchased them. It provides the perfect platform for the companies that subscribe to and advertise in their publications. Buyerzone was already quite profitable from the inferences on its web site, just imagine what could happen as they increase the number of lead buyers in each vertical.

Had Reed not purchased Buyerzone, I could imagine it being attractive to any number of companies in the business to consumer space. There is no doubt that affiliates of AzoogleAds, who is definitely working on their own strategy to succeed across multiple verticals, wouldn’t jump for the chance to promote such a diversified product set; they could do what they do best, find niches of traffic instead of their being a constant epic battle for the same offers. Imagine too, Buyerzone launching a Buyerzone leads product that speak to direct marketers in the consumer lead gen space and acts like Leadpoint does for mortgage; Buyerzone could become the clearing house for a large number of verticals. There are just a lot of things that can be done, and it’s encouraging to see new, for us, ground being broken.