Inside the Data Trade — part three
Some types of usage may lead the way, but unless you continually cultivate them, they won’t continue to generate value
In the early days of silent films, there was porn. In the early days of movies, their was porn. In the early days of chat rooms… more porn. The internet is finally “not mostly” porn. As for social media like Twitter, Reddit, Snapchat, Instagram, and Tumblr… well you get the idea — porn pervades. It is easy to make, cheap, oddly appealing, impersonal, and profitable (for some). It is also shady, corrupt, and associated with viruses (of many types). All that and you need little more than a phone to produce and distribute it.
The Data Trade is not dominated by porn (oddly and yet). This article is not about porn (does oddly and yet fit here, too?). This article is about something else that pervades the data trade. It is easy to make, cheap, oddly appealing, impersonal, and profitable (for some). It is also shady, corrupt, and associated with bad data and bad experiences (no analogy is perfect). And of course, you need little more than a smart phone to fish it up and distribute it (though a laptop is preferable). I am talking about Lead Generation.
When people approach me about Data Monetization, the first thing they want to do is sell their customer lists. Mail lists, email lists, phone lists, and lately social media lists are thought to be a lucrative commodity among the horribly uniformed.
Lists are a commodity, but not one that is difficult to come by. So there is nothing lucrative about them. Those that make a profit in this area make money by selling list “of people who…”. We will dig into that shortly. For now, lets talk about prospect mining and return to our cover art.
Widow’s peak, bad hair, bad suit, fishing with a magnet in a sea of money — this is an image that is far too real and far too expected by a good number of people and businesses. True enough, fishing for prospect names is easy. Anyone with a python script, a laptop, and a long weekend can assemble millions of names, addresses, and phone numbers. Worthless… well unless you are the used car salesman of mailing lists.
If you are currently offended that I have now compared Lead Generation to porn and used car sales… ask yourself how that comparison changes your perspective? Likely, it only reinforces it…
I have often compared data to energy. Prospect mining is like hunting for renewable energy — it is everywhere. The problem is — there is absolutely no value in it, unless you have the technology and process to develop it. In the early days of direct marketing (and those were a century ago), developing structure, integrity, and scale was enough to create a multi-million dollar industry. Over time that grew to billions… then summarily crashed into something easily obtained for $99 today.
Those who make great profits in lead gen, no longer do it from developing scale or structure. They do it by adding a level (or seven) of insight to their lists. The lists that matter are thing like:
- People who just had a baby
- People actively looking for a new home
- People shopping for a new car
- People who spend an hour on Facebook looking at cat videos
- People with thousands in disposable income
- People who “opted in”
- People responsible for… (can’t leave out B2B)
To be honest, even these lists are starting to fade in value. As noted in my last article from this series, many of the FAANGs and other top players have added a platform component to this game. Data Agency will soon displace purely descriptive data, though not as soon as one might expect.
In the meantime, lists that hold their value best are built from event-based mining. They have strong connection to motivation, emotion, and choice. They actually deliver meaningful insight into the sentiment, interest, and intentions of the customers. Or at least that is what they sell you…
These guys are so good — they even sell to Used Car Salesmen. The reality is — until you buy their list and test their data (at which point good luck on that refund), you have no way of knowing if anything they sell you is real!
Now, all good markets reward value sellers with repeat business, but this industry has even countered that by fooling you on the “they”. Most of these vendors are data mills. There is no they. There was a list mined in a week or so and a website that took half that time to spin up. All of which is done overseas to leverage lower labor costs. Good luck finding any contact information. It is Data Agency at its worst and a business model at its cheapest.
At these rates, who needs repeat sales?!?
Feeling a little dirty? Me, too. Lets try to end on a positive note.
Customers are key to any business. In a digital world, you need a customer list. Growth hackers would have you generate it organically, but even they create a list in the process. Prospect mining may be easy. It may be commoditized. But it is a crucial first step.
Lead Generation, on the other hand is… well, a bad label. Generating a lead is just prospect mining. The value of lead generation comes through cultivation of the data, development of the sales funnel, experimental design, test and control, and CLV analysis. These steps establish and validate real value.
Focus on the real value. Understand what truly defines the data trade. The rest is just a distraction that can often be avoided with a good AdBlock software. And thanks for reading!
For help cultivating your customer list:
