Lead Gen – Google takes a Baby Step

ClickZ ran an article that didn’t seem to draw much attention from other purveyors of Internet marketing news, the title of which tells, “AdWords to Host Small Business Landing Pages.” It might seem insignificant, but reading this bit might change your mind, “Google is lowering the bar to entry for local businesses to use its AdWords Starter Edition. For new customers wanting to generate leads online, the company will help create a landing page and host it for them.”

Until I read this article, I can’t say that I had not heard of AdWords Starter Edition, a sentiment echoed by George Sterling on SearchEngineJournal. As it turns out, for those wanting to advertise, there are two. Mr. Sterling provides a quote from Google’s Jonathan Rosenberg who during their Q3 earnings call said, “…the AdWords Starter Edition is an alternative version of AdWords, and it’s a lot easier for novices to get into search advertising.” In that sense, the Starter Edition increases Google’s conversion rate with respect to advertisers who show an interest in the program and advertisers who begin a campaign. Should lead generators be worried? Let’s see.

Thinking through the impact of Google helping sites host a page and collect their own leads, one worst case scenario plays out like this. Small shops no longer buy leads directly from aggregators. They instead collect leads from their own site thanks to Google and the Starter Edition web site. As a result, the tail of lead buyers goes direct (in a way), and Google earns more money by now having a collection of advertisers they did not have earlier. Many of these advertisers, though, most likely do not have a strictly defined CPA. If that holds true, these small businesses most likely did not buy from lead generators in the first place. If anything, after they get a taste of leads and start to learn their CPA, they will seek out lead generation companies. In the meantime, they become new, but high margin accounts for Google but not a threat to the current state of lead gen business.

Google, offering a hosting solution alone does not seem to threaten the current state of business. It could impact lead generation as we know it today if Google decides to help these clients hit their CPA. They have two tools to do so. Google has the already live self-service landing page optimization product. We have written about this product before, mentioning how its genius lies in fulfilling Google’s unwritten rule – making any advertiser locked into using Google and spending more money. The landing page product alone won’t hurt, but if Google decides to help Starter Edition clients (and ultimately Standard Edition) clients hit their CPA by suggesting a CPA they can guarantee (effectively moving towards CPA based bidding), we could see a dramatic shift in the performance-based search landscape. This won’t happen in the near future, but we have to assume Google has tested it and will continue to do so.

Yet another way to view the Starter Edition product is as a vehicle by which competition continues to increase. Google’s tools will help make Google the default platform for countless advertisers, but even the mighty Google cannot escape a simple fact – third party tools help many get good, but none get great. Google will accomplish a feat by bringing more players to the table, but in doing so they will end up creating continued opportunity for those who do search well. At a point, as competition continues to increase (and assuming no Google CPA for Starter Edition clients exists), these Starter Edition clients won’t have the expertise or tools to compete with the experienced aggregators. .

As is the case with any potential challenge, opportunity exists. The same thing holds true for Google’s landing page optimization product. In the end Google continues to help make commonplace practices what those in the direct marketing space do. Just like Google made Internet advertising not only a common word, but an enviable field to work, they will do the same for lead generation. I wanted to worry, but now, I will end up thanking them and suggest we keep doing what we do best and see this as Google acknowledging our work.