VC Money In Hand, Inadco Builds Out Lead Gen Tools For Video Ads

james Walker, CEO, InadcoOver the summer, lead generation company Inadco raised an $11 million second round funding, giving it a total of $17 million worth of venture capital since opening its doors five years ago. Much of that time, the Palo Alto company was in stealth mode. That changed roughly two years ago when it sought to position as more "brand centric" than rival display ad-focused lead gen providers.

The company has built out services and ad formats aimed at consumer packaged goods marketers in particular, with ad tools across search and social as well as display.

The proceeds of the June funding have been going toward the recruitment of about a dozen new staffers – mostly on the engineering side – and figuring out how it can connect lead gen to video formats. We spoke with founder and CEO James Walker about Inadco's developing plans.

AdExchanger: How do you define the lead gen marketplace these days, particularly with the rise of social media marketing?

JAMES WALKER: Oftentimes, folks like Forrester or eMarketer will define the lead gen market as a couple billion dollars. And that is a big under-estimation of how big this market is. My sense is that they're focused on display and social -- and whatever is left over ends up getting attributed to lead gen, email and sponsorships. Email is a great example. It's something that has driven the growth of a lot of great businesses, Facebook included. To suggest that this kind of activity is only a billion dollars is wrong.

The cost-per-lead opportunity includes any marketer buying impressions or clicks intended to drive a user to a landing page and evaluating that spend on an effective cost-per lead basis. That means that they may be paying for CPC or CPMs, but when it comes down to the intent behind that, it's cost-per-lead. Therefore, we estimate the cost-per-lead marketplace as 25 to 30% of [$40 billion] online marketing overall.

So what differentiates Inadco from all the other companies offering lead gen services?

Inadco enables marketers to bring that landing page experience to the ad unit and then identify users who have shown high-intent for a particular product or service. And we can then serve ad units based on that data via display, search and social. We're also looking into video now. And it's all across PC and mobile.

We also see ourselves in the native ad space. We have an ad unit called the "Form Ad." It allows for the two-way conversation between the marketer and the consumer within the ad unit itself. It collects data about that user as well. That experience previously only existed on the marketer's landing page. But now, they can run that experience across all devices and sites where a user has not just expressed intent for a product or service, but anywhere that target audience may be found. The old model of buying impressions to send someone to a landing page – basically, holding out a carrot to a consumer to get them to run down this series of steps to a landing page – doesn't work any more in an increasingly mobile world.

Lead gen is often associated with bottom-of-the funnel, cheaper direct response campaigns. Has that framed your positioning as a lead gen provider?

There is some confusion in the marketplace and that's why I have some problems with the label "lead gen." What frustrates marketers and consumers is when companies are too aggressive in trying to generate a lead, whether it's misleading copy or misleading user experiences. And that's not the business we're in. Inadco doesn't create "leads." We create campaigns that are tied to a particular product or service, which are then aimed at consumers who have expressed a high intent for a particular product or service.

For us, cost-per-lead is not a way of doing things. Our Ad Form unit is performance oriented. But that's just a pricing mechanism and not necessarily a top-to-bottom strategy that drives the kind of advertising we create. It comes from that sense that we're a very engineer-focused company – half of our roughly 30 employees are engineers – as opposed to being overly marketing/sales driven.

You mentioned video as the next stage for Inadco's formats. What's your strategy with respect to video?

Video is a great brand medium. With respect to what we want to do, video fits in well with search and social. We see a particular opportunity with YouTube. That may seem fairly obvious, but if you look at the video ecosystem, there are fewer companies supporting marketing tools for YouTube than Facebook. To be sure, marketers are doing a ton of activity to try to generate attention and generate demand. Inadco can capture that interest and demand. That's all I can say for now.

But do you see Inadco's video plans involving pre-roll? Or something else that YouTube offers?

We see mid-roll or post-roll as the way to go. Once the marketer has created interest, then we can activate a marketing message that fits that moment well. Mid- and post-roll point more directly to engagement than pre-roll, which is why that's better for cost-per-lead purposes.

 

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