Lead generation: golden land of advertising?

Pricewaterhousecoopers recently analyzed Internet advertising in 2007 which rose 26 percent to $21.2 billion in a year-over-comparison to 2006. A summary of its findings reveal that:

Search revenue accounted for 41 percent of 2007 full year revenues, up from the 40 percent for the full year 2006. Display advertising, Classifieds, and Lead Generation accounted for 34 percent, 16 percent, and 7 percent of 2007 full year revenues respectively.

Thus far the communications industry has been mesmerized by the rise of search which correlates with the rise of Google. But search — and perhaps Google — will crest as ad magnets. Big things don’t grow fast and the novelty of search ads is wearing thin. One mainstream web and magazine publisher who will remain nameless recently told me that the share of search revenue to the chain’s flagship web site had crashed from $20,000 a month circa 2004 to under $1,000 a month recently! Why hasn’t Google crashed? Because the web must be bringing new sites and eyeballs to its search system faster than interest is eroding at the places where it is already. But it would be interesting to see, in the search context, what the retail guys call year-over-year, same-store sales. Is income from search at top websites growing or shrinking over time?

But content creators don’t really care about search revenues except insofar as they are a tax on attention that Google is currently able to levy because people are still creating their habit patterns in the new medium. Search, for content creators, is chump change.

So where should content look for advertising support? Big Web content can chase display ads but that competition demands huge traffic and when you get those campaigns, you must rely on exotic methods to prove that you are hitting ephemeral targets like making people love your brand.

So how do small websites grow revenues?

Go after lead generation. It gets to the heart of business. Companies sell products and/or services. Follow the audience. Elicit feedback. If your audience clicks or calls,prospective advertisers will sign and pay.