In my previous post, Where Do ServiceMagic’s Leads Come From? (Part 1), I considered how ServiceMagic uses search engine optimization to drive homeowners to their Web sites…and ultimately generate leads. Now I’d like to consider another channel ServiceMagic uses to produce sales leads: e-mail.
You can read more about using mass e-mail to generate home improvement leads in my previous post, Daddy, Where Does SPAM Come From?
Let’s dig into ServiceMagic’s e-mail program. On their Web site, you can find a simple Web form through which you opt in to receive e-mails from ServiceMagic. Said another way, completing this form gives ServiceMagic the legal right to send e-mail to you on a regular basis.
This by-the-book approach both keeps ServiceMagic legal and gives you—the e-mail recipient—the power to opt-out (a.k.a. stop receiving e-mails) at any time. It also gives ServiceMagic the right to e-mail you, in an effort to get you to visit their Web site and indicate your interest in finding a contractor.
Do you ignore all of those e-mail pitches when they arrive in your in-box? Most of us do. However, just like so-called “junk” mail, a percentage of ServiceMagic’s e-mails do get opened. And some percentage convince homeowners to click through and complete a form on ServiceMagic’s Web site. At that point, those homeowners become leads that ServiceMagic sells to you. All legal and quite legitimate.
You may already be using e-mail to reach your homeowners you’ve got on your own database; good for you. What I described above is a larger scale version of that.
But there’s a darker side to ServiceMagic’s e-mail machine. ServiceMagic uses what are called “affiliates” (I’ll address them in more detail later). Affiliates’ standards for sending out e-mail are significantly lower—moreover, most regularly spam any e-mail address that they can get a hold of.
Let’s look at an example of an e-mail that recently graced my in-box:
This e-mail was likely broadcast by one such affiliate. It has no offer. It has no content or design. No name, no brand, nothing. Its sole purpose is to get you to click one of the two links.
Where did this affiliate get their e-mail addresses? No one knows exactly. Some spammers buy their lists. Others arrange for their servers to continually scan Web pages looking for anything that looks like an e-mail address. When they do, those addresses are automatically added to the list, along with millions upon millions of others.
Note that the recipients do not have the opportunity to opt-in to receive these. They are not necessarily interested in a home improvement project. In fact, they may not even be homeowners.
But make no mistake—affiliates have lots of incentive to do what they need to do. They get paid by the number of leads they can generate for ServiceMagic.
So, if you do click the links, where do you go? Yes, believe it or not, you’re eventually directed to ServiceMagic.com. Upon which ServiceMagic hopes you will fill out a Web form, and become a lead that the Company sells to you.
This e-mail breaks every rule of effective e-mail program design. No opt-in, no offer, etc. And recipients will probably receive this same e-mail dozens of times over the course of months.
But if the spammer sends out enough of them, enough recipients will open them, click on the links and fill out the Web forms on ServiceMagic’s Web site—to enable some spammer in Eastern Europe to make a living.
Now, you’d think that a major brand like ServiceMagic would frown upon this practice. And officially, they do. However, because they run these programs through an affiliate that is a third party, they’ve established a degree of separation. They created, as the politicians say, “plausible deniability.”
Fact is, e-mail spam campaigns drive a significant amount of traffic to ServiceMagic.com. They have become an important part of ServiceMagic’s lead generation mix.
So, ServiceMagic has it both ways. They generate some traffic and sales leads from the legitimate e-mails they send out to homeowners who opt-in on their Web site. But they also generate a significant portion from the dark side – their third-party affiliates whose technique is to send out spam to unsuspecting recipients.
Homeowner Connections Through Performance Online Advertising
