ValueClick recently paid $2.9 million to settle FTC charges that the company was making deceptive advertising claims -- specifically, that ValueClick didn't disclose the costs that consumers must incur to receive products it touts as "free" -- and that its e-mail messages were in violation of federal law and the CAN-SPAM act. ValueClick is widely known as a lead-generation company, and this settlement raised fears that mainstream lead generation companies may no longer be legitimate channels for companies that need to supply leads to their sales and marketing teams.

Despite ValueClick's troubles, online lead generation is here to stay. According to just-released numbers in BtoB Online's Interactive Marketing Guide 2008, lead generation was the second-fastest growing ad format in 2007 (after rich media/video) and will continue to grow at a rapid rate through 2011, when a projected $3.68 billion dollars will be spent on online lead generation in the U.S. Lead generation -- the practice of qualifying potential customers for a product or service by getting them to indicate their interest -- is growing in popularity because of its measurability. Like search advertising, lead generation lets marketers use simple metrics to determine the return on investment (ROI) of their advertising campaigns.

While the ValueClick settlement sent some ripples across the Internet, it will not put a dent in the growth of lead generation. What it does reinforce, however, is that companies that use the types of bait-and-switch tactics employed by ValueClick will not succeed. Such tactics typically involve granting rewards to consumers for providing their data with offers such as free gift cards or the chance to win a trip to a tropical location. The incentives seldom attract the quality leads that are needed by the company purchasing them. A tropical vacation might attract a good lead for a travel agency, for example, but would be a terrible lead for a financial services company that is looking for married couples over the age of 55 who are planning for retirement. Companies that use unrelated incentives to attract an audience will not be able to provide the volume of high-quality targeted leads that companies need.

Another misguided lead-generation tactic is using paid search advertising to drive traffic to lead gen offers. Companies that generate leads based solely on traffic gained from paid search advertising aren't going to provide the high-quality audience that's needed to generate high-quality leads. The search audience is broad -- and primarily unfiltered and untargeted -- so using search as the sole traffic-driver dilutes the quality of the leads that are captured.

There are several ways to carry out successful lead-generation campaigns, and companies are going to have to employ these tactics going forward in order to get the best returns from their lead-gen spends. First, companies need to rigorously tailor their offers to the audiences they are trying to reach. If a hardware company is trying to find IT managers to purchase its servers, a white paper, video, or webcast about those servers is good "bait" to get qualified leads. The offer needs to be something that the audience would want to receive only if they are a highly qualified potential lead -- in this instance, only someone who is interested in servers would bother to read a white paper or sit through a presentation about servers.