Thoughts on Tech, Deals, and Markets

Competitive Advantage in Lead Gen Part I

with 2 comments

There are many knocks against lead gen businesses:  no barriers to entry, no customer switching costs, no real technology is necessary, overly dependent on Google, unsustainable margins.  And so forth.

There are kernels of truth in each of these claims.  But they mask the fact that a lead gen business at scale can build a large and durable competitive advantage.   A great lead gen business can expect to enjoy continuing growth and profitability excepting extraordinary challenging business conditions (such as what occurred in the auto and mortgage verticals and what might be happening in others if the economy continues to worsen).

A great lead gen business exploits positive feedback between its media buying efficiency, conversion optimization, and customer relationships.  Scale and technology drive each feedback loop.  In short, all these levers allow it to monetize certain types of traffic better than competitors.  This monetization advantage represents an enormous competitive advantage.

I detail these key dynamics in the following posts:

Competitive Advantage in Lead Gen Part II

Competitive Advantage in Lead Gen Part III

Competitive Advantage in Lead Gen Part IV

Written by sandykory

January 22, 2009 at 7:38 am

Posted in Uncategorized

2 Responses

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  1. […] a comment » In my last post, I mentioned the three potential layers of competitive advantage in lead gen:  media buying, […]

  2. […] Recently I’ve explained how lead gen businesses gain competitive advantages through a positive feedback loop driven by scale and technology, through efficient traffic buying, and through conversion and […]


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